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@patricknyuma72, I agree, budgeting can be really difficult and force you to change scope and time.
The parametric approach seems to be the best one to use as much as it is possible, since it is based on actual, established prices.
I agree that the combination of top down, bottom up and parametric approach will work best. Salaries and services can vary and there has to be a reasonable estimate that is acceptable which can be a result of combining the top down and bottom up approach. then the Parametric approach will allow total units calculations. Deriving activities from a properly organized Work breakdown structure will enable a close to accurate estimate of needs which then speaks to the budget estimation.
In my opinion Parametric is the best option, only that I think it can happen in isolation it differently involve the other type. It is the best because it will have exact amount or a bit beyond.
Both the parametric and bottom up approaches are the best
I think the Top-Bottom budget is the most appropriate because it save time and involves use of experts.
i believe that a combination of the three is needed because different scenarios will warrant different approaches. The best approach is to asses which method will work best.
I believe the parametric approach is more realistic because it gives closely to the exact market prices and it gives 80% assurance about the purchase prices compared to other approaches
top down approach is better .
In schools we like to use a parametric approach when we can. We are required to produce yearly 5-year budget forecasts, and knowing and predicting costs is a central part of this budgeting.
Agreed- again, school budgets are driven by salary costs. Knowing the cost ahead of time makes school budgeting possible.
I believe that you should use the parametric approach whenever possible becuase it gives you a more accurate estimate of cost. Using the cost per unitnof material/supply, you could come up with a more realistic cosr estimates and budget for a certain activity.
Prefer using Top down approach beacuse it is relatively quick and simple
I believe that you should use the parametric approach whenever possible because gives the actual costs required for the project. It also eliminates the risk of dishonesty among employees tasked with handling the budget. However, there may be instances where top-down will also work best for your project. It may also happen that using these approaches together may work best for your project.
All approaches are applicable. I prefer the parametric for procurement purposes, Bottom- up because the person who spends has to vouch with receipts, Top down works when key decisions are being implemented.
I like using Top-Bottom approach because more stakeholders can be involved from the beginning. Getting more insight and feedback.
I believe that all three methods of estimating costs might need to be used depending on the activity.
Wow, very interesting to have a lot in details about project management.
and here in module two the schedules and budget kills all.
but top-down you are deciding for the implementers, i think the best is to mix two approaches.
what about bottom-up?
We use a lot of the top down approach, since budgets are primarily created by management or fund development staff when they apply for the grants.
I like your "it depends" take. Sometimes it is a new project, where we have less familiarity with costs than other times.
I believe that you should use all three estimate approach whenever possible because it provides room for comparison and come up with a realistic budget for the project, in that in Topdown it involves experts and some managers while Bottomup which is realistic if you have honest people as this are the implementors of a project , in some case the paremetric can also be used as some of the activities may have some set parameters which are known.
I believe that you should use all the three estimate approach whenever possible because it provides room for comparison and come up with a realistic budget.
In that in Topdown it involves experts and some managers while in Bottom up which is realistic if you have honest people as they are implementors of the project. in some cases the parametic can be used as some of the activities have some set parameters which are known and it will enable you to have accurate estimate costs for the budget
I see that it would be good to use the three approaches because they are interdependent
For me parametric is best because it is easy and the cost is already known. It is not complicated, easy to manage, and it is fixed.
the project manager, director, stakeholders and funders are the ones responsible for generating cost estimates for projects.
I believe that you depending on the type of project, the approach to be used is evaluated, but I believe that the most optimal is to use a combination of the three since multiple products, raw materials, etc must be taken into account in the projects. But if it is a project where I have to buy specific things, I would select the approach parametric
because it is a more efficient method in my opinion. For example, when you already have experience in projects, you already have quotes or values that are more real and updated with the market. But if you do not have experience in projects, they could be based on public projects that have the same raw material or carry out commercial surveillance.
@Joeblerk It is very complex to select a single approach because projects have so many purchasing requirements and so many indoles that sometimes the parametric approach works well, but I think that almost all projects the mixture of the three approaches works better.
And what about projects where you don't have the value of these costs? Sometimes, for example, a certain person who collaborates in the project is the one who handles certain values and sometimes it is necessary to ask the other members of the work group or sometimes the opinion of experts or researchers in the area is needed.
It's true
I agree with you, because not in the entire project you can have the exact unit value and more for example if the project is formulated in one year and carried out in another. On the other hand, many things can happen that can increase the value of some material, so here a single approach would not be beneficial.
Yes, this approach is so clear and simple. But figure a situation out where the services or products that you will need to pay for can not be divided. So, this approach is limited.
Parametric approach is the best and not very complex in nature so I think it is better to follow
Bottom up estimation is the best mode of operating
Thanks for your wonderful ideas
It may depend on the project taken and it may vary
It will be better to apply allthe three approaches and get the best results
Bottom up approach is definitely the best
Thanks a lots for expressing your views on cost estimations
I believe the top-down estimates are the best to use because this way you can have projected costs and the go ahead to create a budgeted spend that will guide your negotiation with vendors. As a non-profit project manager, I always look for at least 20% cost savings on each line item. This way, I have just enough to spend and end up with a surplus at the end.
The parametric approach because this approach allows us to spend according to our budget. once you have the unit price, you can buy a quantity of material from the amount fixed in the budget.
I believe that you should use the parametric approach whenever possible because you get to know the cost of every unit of items and it helps to know where to make adjustments .
Though using all three approaches in estimating the cost may take more time than using one of the three, I think one will be better informed on the cost estimates and thus minimising the chances of either underpricing or overpricing.
The approaches sometimes may depend the the work culture of an organization. However, for me i feel that the bottom up approach is best because it will be more accurate, true and is the best expected expenses required as it is submitted by the project implementers with their experience and knowing the ground reality.
How do we respond to the changing situation and market prices?
The parametric approach is only when unit cost can be calculated. However, in complex projects this might not be the best option.
Basing on the fact that estimating activity costs comes after listing activities and estimating the resources needed and knowing the actual cost per unit resource makes parametric a better option and the fact that bottom up gives a room for dishonesty that would led to overbudgeting and top down is most likely to give costs that does not match with the real cost which would present a risk of less budgeting.
I believe that you should use the top to bottom approach whenever possible because of its simplicity.
All have their merits, however the top down approach in my opinion would be the best approach because using experts has the advantage of not only being experts in theory but also in practice especially in our part of the world where you cannot be an expert without any field knowledge (that is a scholar).
I believe a combination of all three approaches works best whenever possible when estimating costs, especially in this climate of escalating costs on a daily basis. I like to use whatever experts I have available who can help keep these estimates realistic. In my organization, I rely on the wealth of volunteers I have who are experts in their respective organizations or careers, especially those who are consultants.
For me Bottom-up budgeting approach can be the realistic one because, when you involve people who will be spending money to come up with their activity budget and you as a PM consolidate those budgets to come up with one realistic budget. For sure this type of budgeting can be of much help and easy to go about.
In my opinion the it will be good to use all of the three approaches because doing so can eliminate the disadvantages of each approach. One can use the top down approach and generate cost estimates through consulting expert and doing some research. Then this can be further ascertained using the bottom up approach which is more realistic cost based. And the third approach can be used if there is any unit cost calculation involved.
Use the three methods ie;top down approach,bottom up approach and parametric approach.the three approaches complement each other.The top down approach involves experts,some research and managers,the bottom up approach involves individuals and realistic when they are honest and parametric is applicable when you have cost per unit.
I believe that you should use the parametric approach whenever possible because the approach help when you have a cost-per-unit that can be reliably calculated. In which multiplying that cost-per-unit times the number materials or number of times the activities occurrence or number Resource we need to use in a project.
In as much as parametric seems to be more efficient, I believe we should also consider leveraging and incorporating what the other two may offer to come up with a hybrid solution
Top-down
Top up on my sid dounds more accurate because you will have to get the researcgers to give out the estimates to work on. Its creates honesty
The parametric approach is more realistic and may be cost effective in the long run
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In my opinion parametric is the best approach. Having unit per cost, you can multiply by number of units and get exact and accurate cost figure without over budgeting or underbudgeting the activities.
I would use a mix of all the three.
Start with top-down to get overall budget idea
Use bottom-up to know costs of field activities from employees
Use parametric to know costs of items.
The combination of bottom up and top down is a good one. It allows those that will implement the project to participate in budget development and also helps to monitor every expenses included in the budget
I think the parametric is the best because it explain itself to any one who pick up a the document without help from anyone.
parametric estimate would be the foundation because it is based on actual project, top down and bottom up will be a guide only
I believe that you should use all the three approaches because they're all helpful but the best way to use mostly is parametric approach.
Considering the community oriented approach of my workplace, a bottom-up approach to estimating activity costs would be the most effective and fitting. This is because communities we work with would have input in planning and decision making processes — they are the experts, not us. Even though it may be more time consuming, it is worth having the involvement and input of community members.
For the fact that you have not done similar activities before, it is good to use the top down budgeting approach. In the case where you have an experienced staff at the bottom of your organogram, you can use the bottom-top approach. The parametric approach is appropriate when the organization has some learning from implementation of said projects and can record without any big difference, the exact cost of line items or close to the cost. Meanwhile, a combination of these approaches though will be time consuming, but could also help.
How effective will the parametric approach be, if you are new to the project scope, and product scope as an organization?
I believe that you should use the parametric approach whenever possible because we work on factual data and not estimates since not individual may know all costs accurately
In my opinion I believe that parametric is the better option out of the three. Because it is what I call easy math. The numbers need to always add up and not be to difficult.
I believe that you should use the bottom to up approach whenever possible because it's more realistic and if there's any cost change can be predicted from the person who spend the money more than the people who buy in only once
I believe that you should use the all the approaches whenever possible because each activity would required different approach to be well included in the budget.
Oct 13, 2020, 2:33 PM
I agree with @JoeBlerk about parametric being the better option out of the three. In a third world setting, where the number of experts available to pitch in on a top down cost estimate are limited, and where dishonesty is rampant enough to effectively tamper with the bottom up approach, the parametric way seems to be the best logical option to take as long as unit prices are known, which is most often the case in our settin
Hi.everyone
Nice courses
The parametric method of budgeting is highly effective for me as it will give me exact costs per child in terms of accommodation and transportation, however, honestly the bottom-up approach is needed in areas such as providing meals (I really would need to speak with the Chefs to work through an estimate of the entire budget for meals for my camp project). Therefore I cannot say one is better than the other as I would need to apply both budget styles.
I agree with @JoeBlerk ,using parametric approch is simple and easy for budgeting sepecially for small budget estimation than the other two approaches.
would rather use all three approaches to have realistic estimates because almost each team member contributes hence it becomes easy during implementation because everyone is aware of the budget estimates and is easy to implement and use resources carefully according to the goals of the project and organization.
Hi everyone,
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I believe that you should use all three approaches whenever possible because they serve best by combining these three approaches.
To estimate the costs of my project, I would use the top-down method when planning with my team, then during implementation according to the realities on the ground, I would use the bottom-up approach to make adjustments and thus obtain more real costs.
In my opinion, the best ways could be combining the three.
The most common way to estimate costs is to make a list of items you need and add up their costs. Make sure you include all applicable costs, such as equipment and parts, materials and supplies, labor, financing, fees and licensing, transportation, and acquisition costs for land or facilities.
Cost estimation in project management is the process of forecasting the financial and other resources needed to complete a project within a defined scope. Cost estimation accounts for each element required for the project—from materials to labor—and calculates a total amount that determines a project's budget.
I prefer to use Parametric Estimating because, it is one of the most accurate techniques for determining a project’s duration and cost. And, parametric estimating is fairly easy to implement as you define the specifications of each unit of the deliverable. But the best way is to use all three Estimating activity
I think the parametric is the best because it explain itself to any one who pick up a the document without help from anyone.
in my opinion, the best way to estimate costs is by integrating the three approaches. By doing so, you get expert opinion and at the same time are able to make a comparison with people that are actually doing the implementation of activities.
The approach to use may be sometimes be context specific, but I believe the parametric is the best as it rules out all inadequacy.
I Believe that you should combine the three approaches, you will be serve best.
I agree with you that parametric is the best, but as the prices frequently fluctuates, I think it is critical to first do up-to-date market-based research about the prices to come up with more accurate budget.
On the hand, as there are some points where parametric can't be practical, for instance, if there is a project of building poultry houses for number of local farmers at their residents, cost will vary according to the nature of their grounds.
I'd like to recap that each one of the three can be proper way according to the situation.
Paramentric approach is good for a project because it gives accurate information of what will happen.
Parametric is usually easier as a consulting as we usually quote by man hours, or service units which are more transparent and easier to calculate
The three approaches should be combined in the costs estimates of a project. I particularly have preference for the bottom-up approach. This approach has the advantage of producing more realistic estimates simply because of the involvement of the individuals in the chain of activities.
I prefer using all approaches possibly. This is so to complement each other.
I PREFER TO USE THE TOP-DOWN APPROACH BECAUSE IT IS EASIER AND ALLOWS EVERY MEMBER OF THE TEAM TO HAVE A INPUT AND TRANSPARENCY CAN BE ACHIEVED.
In my opinion it is best to combine all 3 approaches as not all approaches would work on every expense you'd like to estimate.
I believe the three approaches are best to a particular situation at hand, based on the explanation from the module I can suggest that the parametric approach would be easily utilised when the project is an experienced one, where the data for activities expenses are already known or else multiplying with the wrong unit value Will give a wrong budget, therefore a re-occurring project scope where the manager is experienced with the event, parametric seems to be the best, but for a novel or inexperienced manager, top-down will be the most convenient maybe not the best but most workable, the bottom-down will find it most convenient with a small project scope where finance might not even Matter much, like a project goals involving, small participate as beneficiaries.
in my opinion ,the bottom up approach is more suiting though time consuming but its realistic because estimates are done by a person who is actually doing the job yet top down cost estimates may not be real