What does bottom-up estimating involve?

Bottom-up estimating is a detailed approach to cost estimation that focuses on calculating total costs by adding up individual components of the project. This method involves breaking down the project into smaller, manageable parts or work packages, estimating the costs for each component at a granular level, and then summing those estimates to arrive at a total project cost.

This approach is particularly useful because it provides more accurate estimates, as it reflects the specific requirements and resources needed for each task. By taking into account the labor, materials, and associated overhead for every component, project managers can create a more precise budget that helps in better resource allocation and management throughout the project lifecycle.

In contrast to other methods, bottom-up estimating allows for a thorough understanding of cost drivers and can help identify potential cost savings by analyzing each element of the project separately.