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I believe that you should use the bottom-up approach whenever possible because in as much as it requires more time and its proneness of the expenses made on the resources being manipulated or hiked by the staff in charge of market survey and budgeting (but this particular drawback can be curtailed with strict supervision and the aid of e-commerce as products and services are now digitally marketed for accurate prices of resources to be used, this way budget can be verified, cross-checked and be more accountable). This approach is useful for developing detailed project budgets, schedules and monthly forecasts. It also helps define the specific skills needed during key phases of the project in order to get a more accurate schedule which invariably enables the engagement of skills of the project team.
I believe that you should use the bottom-up approach whenever possible because in as much as it requires more time and its proneness of the expenses made on the resources being manipulated or hiked by the staff in charge of market survey and budgeting (but this particular drawback can be curtailed with strict supervision and the aid of e-commerce as products and services are now digitally marketed for accurate prices of resources to be used, this way budget can be verified, cross-checked and be more accountable). This approach is useful for developing detailed project budgets, schedules and monthly forecasts. It also helps define the specific skills needed during key phases of the project in order to get a more accurate schedule which invariably enables the engagement of skills of the project team.
parametrics is better but bottom up
@ThaoTran said in Module 2 Discussion: Estimating Costs:
This is the module 2 discussion. You may participate in this discussion after beginning module 2.
In this module, you have learned about three approaches to estimating project costs: top-down, bottom-up, and parametric.
In your opinion, what is the most effective way to generate cost estimates? Make sure to explain your response.
Sample response: I believe that you should use the _parametric - approach whenever possible because _when you have a cost per unit that can be relatively calculated , accurate and reliable is the best option , however must of the building materials for project are base on unit per item supply example, if you are buying a block for building a wall , you may required a of numbers block to purchase per unit eg if the price of the block is N10.000 per one and the total block needed to build the wall is 5000 you simple multiply that 10,000x5000 to give you the required price and quantities of block you need to build the wall perfect. While bottom-up approach can produce Les realistic cost estimate than the top-dow approach because it can be time consuming and difficult to coordinate however, the employee may occasionally be dishonest about the expenses , this will affect the budget and the success of the project but in parametric approach the cost incur is transparent. however, top-down approach is relatively quick and simple but may be out of touch with real cost , also is not the best option to use .A good project manager most always monitor the time, budget and scope of the project to be a successful manger because they work hand in hand at the right in the project charter in order to be properly guided in discharging roles and responsibilities . a project manager must balance all three constrints ______________ .
@anadimarystella ,thank you for expressing your opinion on cost estimation.The bottom up budgeting approach surely has its advantages and one of the challenges is the possibility of cost inflation by dishonest employees.The use of e commerce ,verification and crosschecking of facts given by staff are also brilliant ways to curtail this.
@ObafemiDeborah ,thank you for your answer.Could you briefly explain why the parametric budgeting approach is much better than the top down budgeting approach?
@ThaoTran said in Module 2 Discussion: Estimating Costs:
This is the module 2 discussion. You may participate in this discussion after beginning module 2.
In this module, you have learned about three approaches to estimating project costs: top-down, bottom-up, and parametric.
In your opinion, what is the most effective way to generate cost estimates? Make sure to explain your response.
Sample response: I believe that you should use the _parametric - approach whenever possible because _when you have a cost per unit that can be relatively calculated , accurate and reliable is the best option , however must of the building materials for project are base on unit per item supply example, if you are buying a block for building a wall , you may required a of numbers block to purchase per unit eg if the price of the block is N10.000 per one and the total block needed to build the wall is 5000 you simple multiply that 10,000x5000 to give you the required price and quantities of block you need to build the wall perfect. While bottom-up approach can produce Les realistic cost estimate than the top-dow approach because it can be time consuming and difficult to coordinate however, the employee may occasionally be dishonest about the expenses , this will affect the budget and the success of the project but in parametric approach the cost incur is transparent. however, top-down approach is relatively quick and simple but may be out of touch with real cost , also is not the best option to use .A good project manager most always monitor the time, budget and scope of the project to be a successful manger because they work hand in hand at the right in the project charter in order to be properly guided in discharging roles and responsibilities . A project manager must balance all three constraints and ensure proper monitoring and evaluation of the project that guarantee the stork up saver is sound for smooth operation. .
Three of these approaches are good and useful. For me, parametric approach is more reliable than others. The cost per unit can get from online website today.
@ThaoTran said in Module 2 Discussion: Estimating Costs:
This is the module 2 discussion. You may participate in this discussion after beginning module 2.
In this module, you have learned about three approaches to estimating project costs: top-down, bottom-up, and parametric.
In your opinion, what is the most effective way to generate cost estimates? Make sure to explain your response.
Sample response: I believe that you should use the _parametric - approach whenever possible because _when you have a cost per unit that can be relatively calculated , accurate and reliable is the best option , however must of the building materials for project are base on unit per item supply example, if you are buying a block for building a wall , you may required a of numbers block to purchase per unit eg if the price of the block is N10.000 per one and the total block needed to build the wall is 5000 you simple multiply that 10,000x5000 to give you the required price and quantities of block you need to build the wall perfect. While bottom-up approach can produce Les realistic cost estimate than the top-dow approach because it can be time consuming and difficult to coordinate however, the employee may occasionally be dishonest about the expenses , this will affect the budget and the success of the project but in parametric approach the cost incur is transparent. however, top-down approach is relatively quick and simple but may be out of touch with real cost , also is not the best option to use .A good project manager most always monitor the time, budget and scope of the project to be a successful manger because they work hand in hand at the right in the project charter in order to be properly guided in discharging roles and responsibilities . A project manager must balance all three constraints and ensure proper monitoring and evaluation of the project that guarantee the stork up saver is sound for smoth operation. .
Estimating cost give you the opportunities to have the an overview of the price of goods and services estimate being it top=down approach, bottom-up approach or parametric approach but can be use where necessary. therefore cost estimate guide a project manager on how to plan and manage the available fund base on time, budge and scope of the project.
I agree with this statement. Each option of estimating activity costs can be necessary depending on the project. If possible, all three of them must be practice or use to the fullest to achieve better project estimates.
In my opinion, parametric is the most effective way to generate cost estimates, because, such estimates are based on known per unit costs. Hence, it might be more realistic
@Kaung-KT_1997 ,thanks for sharing your response with us.
@aira_m ,I love your answer.
@Owuna ,thank you for highlighting the advantages of the parametric budgeting approach.
As mentioned on the not each have there own advantage to identify the best it is base on the condition when you prepare budget, but if I am forced to answer this I choose bottom - up approach the disadvantage of over estimate can be tackled with different (desing) means.
The parametric approach is much for effective in my opinion. One reason is, with this approach, donors and stake holders can make their research to confirm if it is a feasible and honest budget for the said project. The parametric is reliable. The project manager, with this approach, doesn't get to use the opportunity to make personal profits from the project budgets.
@samuelyared1980 ,thank you for expressing your point of view.
@LARDO ,thanks for sharing your opinion on the parametric budgeting approach.
Combination of all approaches yields a better project output
You can subdivide your work into several tasks and sub-tasks until it can achieve your goals.
@ALLYNA ,thank you for your answer.
@Simba1 ,thank you for your answer.
In my opinion, the most effective way or method to generate cost estimates is to combine the three aproachs -top-down, bottom-up and parametric - even though combining these three aproachs consume time, it is better for generate realistic costs and for assumptions.
@fvjl2983 ,the idea of using all the three budgeting approaches in a complementary manner is impressive.Thanks for sharing your response with us.
I will use the parametric approach
I believe you should use the parametric approach because it is more accurate and can reduce the tendency of fraud and the number of people that could influence the budget to suit their personal interest where there is no intergrity.
I believe you should use the parametric approach because it is more accurate and can reduce the tendency of fraud and the number of people that could influence the budget to suit their personal interest where there is no intergrity.
@Mbuyib ,thanks for your answer.
@Mafo007 ,like you said;the parametric budgeting approach blocks dishonest employees from inflating the cost estimates.Thanks for this brilliant point of view.
I believe you should use a parametric approach whenever possible because you are getting opinions from all angels. The individuals spending the money as well as the individuals higher up in the organization (who likely have experience with budgets) can work together, access all risks involved, and create a more comprehensive budget.
@cocaav ,thanks for your answer.
@ThaoTran said in Module 2 Discussion: Estimating Costs:
This is the module 2 discussion. You may participate in this discussion after beginning module 2.
In this module, you have learned about three approaches to estimating project costs: top-down, bottom-up, and parametric.
In your opinion, what is the most effective way to generate cost estimates? Make sure to explain your response.
Sample response: I believe that you should use the _______ approach whenever possible because _______________ .
@ThaoTran said in Module 2 Discussion: Estimating Costs:
This is the module 2 discussion. You may participate in this discussion after beginning module 2.
In this module, you have learned about three approaches to estimating project costs: top-down, bottom-up, and parametric.
In your opinion, what is the most effective way to generate cost estimates? Make sure to explain your response.
Sample response: I believe that you should use the _______ approach whenever possible because _______________ .
@ThaoTran said in Module 2 Discussion: Estimating Costs:
This is the module 2 discussion. You may participate in this discussion after beginning module 2.
In this module, you have learned about three approaches to estimating project costs: top-down, bottom-up, and parametric.
In your opinion, what is the most effective way to generate cost estimates? Make sure to explain your response.
Sample response: I believe that you should use the _______ approach whenever possible because _______________ .
I believe that you should use the bottom-top approach whenever possible because it is the most accurate approach. Parametric approach is not applicabe in all expenses whereas top-down approach is not accruate. Therefore, eventhough it is a hard work, bottom-top approach is accurate and it helps us to get more confident to control our rest of work.
I have applied top-down and parametric approach. And as mentioned, they both have their pitfalls as the latter doesn't always apply to all project expenses. I think I might like the bottom-up strategy since it requires involving those that will spend the money because they interact with the items or services needed to carry out the project. My reason for liking this is, it can reduce the level of unforeseen additional expenses. for the disadvantages, I think the solution for preventing delay is to start early. Then on dishonesty, a project manager shouldn't be clueless about prices. At least have an idea so as to know the percentage of extra or non-existent cost. Sometimes you might actually be stock with a dishonest person, particularly in unfamiliar terrains. Consider a situation where you have already engaged someone and the transaction is costing you as leaving the person will slow you down or take you backwards and even attract additional expenses. So, it is best to know the level you are being cheated and manage a dishonest person. I think having a strong negotiation skill can protect a project manager here.
@shinukjoy ,thanks for expressing your point of view on cost estimation.
@leadoutirene ,thanks for sharing your point of view regarding the parametric & bottom up budgeting approaches.
You're welcome@ALUG. Let me seize this opportunity to address one of my challenges. Please I'm behind schedule as I was meant to have finished two days ago. But I'm proceeding with the course because I want to learn and this is the right time for me. Also, are those assignments mobile phone enabled? Can we use mobile phones for them?
the important thing would be for a project manager to know how to get used to contextual situations in the budgeting of his project budget.
the important thing would be for a project manager to know how to get used to contextual situations in the budgeting of his project budget.
@leadoutirene ,Philanthropy University's website is mobile friendly,you can certainly use your mobile phone to do your assignments.The courses are self paced,you can always study at your own convenience.For this reason,you're not behind schedule.There is an option for typing your responses directly into the forms availed to you on the end of module assignment page.
@Libntchi2 ,thanks for your thoughtful response about project governance.
You're welcome @ALUG. Let me seize this opportunity to address one of my challenges. Please I'm behind schedule as I was meant to have finished two days ago. But I'm proceeding with the course because I want to learn and this is the right time for me. Also, are those assignments mobile phone enabled? Can we use mobile phones for them?
@leadoutirene ,yes.You can complete your assignment on a mobile device.A tablet or smart phone with a sizeable screen are the best options.
the more realistic one is top down if your time is limited and give the cost of activity separately. If you have enough time start Top down.
thank you
@leadoutirene ,you're welcome.
@kabul,thanks for your answer.
Okay noted @alUG. Thank you.
Each of the approaches has it's own perculiarities. And depending on the conditions on ground, during budgeting, a manager should make decisions realistic enough to capture the perculiarities of their project. At times when the budget becomes urgent, one might consider the top down approach bearing in mind its setback as risks ( planning on manaagim them should they occur).
In situations where budget is not chased by time, and employers are trust worthy, the button up approach could be an option. Whereas in budgeting for activities for which prices of materials can be costed per unit with a very much level of confidence, I will recommend parametric approach. All things being equal, a blend of the three approaches will give u room to compare and contrast, and come up with what seems to be the best for you.
@Alameenbichi ,thank you for your thoughtful answer.
I beleive that you should use the parametric approach to estimate whenever possible because its fast, more precised and also prevents spending excessively as a result of people's dishonesty that can be encountered using the bootom-up approach and the discrepancy from the real cost that may arise using the top-down approach
Okay noted @alUG. Thank you.
@Adetokunboolugbenga ,thank you for expressing your point of view on cost estimation.
a parametric budget however will need a thorough market research for it will serve its purpose
very true. but i think it also need some input from the traditional budget, so that it is easy to project any future costs by looking at the past trends...
another advantage is that it increases the levels of transparency in one way or another if a unit cost of something is known
in as far as budgetting is concerned, how can it be done well so that it does not conflict with the m&e costed work plan?
in instances where a parametric budget cannot work, and it is the one the donor wants, how best can that be handled?
is there a need to create provision or room for any incoming revenue from outside, apart from the one from the donor? and how can external money be used so that it does not conflict with the donor money?
true. but is there a way that both the top down and bottom up approaches of budgetting are used together?
I believe that we should use whenever possible bottom-up approache because the cost are very realistic and when implementing activities it will be easy. We have generally cost problem due to underestimate some activities by finance that work with top-down approches.
@Alameenbichi ,thank you for your thoughtful answer.
@SeydouDoumbia ,thanks for highlighting the advantages of the bottom up budgeting approach.
@Josimp ,yes.Incoming revenue that's not donor money needs to be separated from the funds donated by donors.I say this because donor money sometimes(but not always) comes with terms & conditions that must be followed to the letter.Its always better not to mix up these funds.One of the ways of separating these revenue streams is by opening a bank account for each of them to prevent mix ups.
@Josimp,the bottom up budgeting approach can be used at the early stages of cost estimation.The facts and figures collected using the bottom up approach are reviewed by middle & top management such that the top down budgeting approach is implemented.
@Josimp ,under what circumstances wouldn't the parametric budgeting approach not work?
@Josimp ,the most important thing I believe is budgeting for the project activities on time to prevent any possibility of delays.
I think the parametric approach, is the most effective way to generate cost estimates because is more reliable and simple to calculate .
The parametric approach is mostly adopted here for the estimate itself further broken down into direct, indirect and overhead costs plus some contingencies.
I beleive there is no best or worst way to generating costs of a project. Few things are important in estimating a project cost. One is "who is going to be in charge of spending the estimated cost." This is important because if the same person who is involved in estimating the cost, especially in the top-dowm method is still the person who is going to carry out the expences, it becomes necessary to know before hand the inetgrity of the individual involved. But where this is not the case, and the estimator of the cost does not have any relationship with the person in charge of purchese, given the experiences of the top echoleon of the project management, it will be possible to generate a realist cost.
In the bottom-down approach, when the cost are generated by the same people who will be directly involved in the expences, there is a possibility of bias. This brings up the second issue, which has to do with the integrity of the people involved in the estimation of the projects costs. This helps in a very way in generating the real cost of the projects and the required quality of the project materials.
The parametric method, though provides a better method, is not applicable to all projects. This is its problem
The parametric approach is based on cost per unit, it is important this cost per unit based estimated is carried out as soon as the project is about to begin. this will forestal the consequences of inflation that may increase the cost of the project activities and increase the rsiks and constraints.
The course is powerfully packaged. Thank you to the facilitator(s).
@Noureddine20 ,thanks for expressing your point of view on cost estimation.
@DCUN ,thanks for sharing this brilliant and thoughtful suggestion with all of us.
@DCUN ,thanks for expressing your point of view on cost estimation.
@SintayehuGetachew2020 ,thanks for expressing your point of view on cost estimation.
I thank you more.
Thank you too.
@DCUN ,you're very welcome..
I would go combining the bottom-up and top-down approach. Ofcourse paramatric when ever possibile to get the unit prices. Validating the top-down data with project Team (Distribute among the people who actually will done the job) helps in further communication of the project. The top-down approach will help to forseen the potential risks. So combning all when ever possible seems attractive idea.
@AM20 ,thanks for clearly expressing your point of view on cost estimation.
Thanks for engaging my dear colleagues. What a nice contribution from each and everyone!
This platform is really a knowledge-based one.
I believe that we should use in the same time the 3 approaches as much as possible because it will allow us to have a more realistic idea on the real budget to be implemented.
using both the top-up and bottom-down which i call the hybrid approach is fundamental,for use the top-up at the starting of the project since top management will have better idea of the project at that moment which will eliminate time wasting and brace alignment,then half way through the project use the bottom-up approach since managers and staff will accurately estimate the cost better at this stage.
@Sir_Johnson_De_Great ,your satisfaction is our joy.
@Sir_Johnson_De_Great is an e learning platform that we must be grateful.
@jtshibangu23 ,thanks for expressing your point of view on cost estimation.
@abassk ,thanks for sharing your point of view on cost estimation.
In an ideal world, parametric is the most effective, as it removes the chance of mistakes and human error. However, project planning requires a certain element of the unknown, so this will not always be possible.
I believe a combination of the three is best, with collaboration between those involved in top-down and bottom-up approaches to ensure highest accuracy.
@hollycoulter ,thanks for expressing your brilliant point of view on cost estimation.
I think the parametric method of budgeting is best suited because i think it is the most scientific method as against the other 2 methods that are quite subjective
@Erunuma ,thanks for highlighting the advantages of the parametric budgeting approach.
I agree with this approach. We may require to use all three as per the need of the projects.
@Utkalika15 ,thanks for expressing your point of view on cost estimation.
the parametric method is more relable because i can obtain the unit cost of most of the resourses needed for the project by obtaining market quotes from suppliers and build the budget with other methods such as the top down and buttom up methods
@FolaR ,thanks for highlighting the advantages of the parametric budgeting approach.
For me parametric approach is the best approach, first because it is not so complex all that is needed is to ensure that you have a true actual cost per unit and then do the multiplication, and this calculation are quite simple, so generally it sure simplifies a seemingly complex activity.
I think the parametric method of budgeting is best suited because i think it is the most scientific method as against the other 2 methods that are quite subjective