Question

What factors impact the quality of a bottom-up estimate? Discuss at least four factors – 300 words.

Answer 1

The factors that impact the quality of a bottom-up estimate are as follows:

1. Planning Horizon: Planning horizons include the accuracy of time and cost estimates of the project. all these factors should improve as the project progresses from the conceptual stage to the point where individual work packages are described.

2. Project Duration: The projects of Long-duration increase the uncertainty in estimates and other forecasts. The price of technology can decrease over time, though labor, equipment, and operations can increase over the same period. But at what rate they gonna increase or decrease is the matter of concern.

3. People: The “people” element can include challenges in the estimating project process. A familiar match of skills will influence the project estimation by enhancing the productivity and learning time and, also, the opposite is also true that the productivity can be decreased because of people factor in the project. employee turnover and whether they have worked on projects together before also influences an accurate estimation of the project.

4. Project Structure and Organization: Project structure includes matrix, functional, and projected that is a great impact on the success of the entire project and the opposite is also the case when it can fail. The “speed” benefit of a focused and dedicated team comes at a higher cost than a matrix team however a matrix team can not deliver as fast due to competing demands and divided focus.

5. Padding Estimates: As far as the estimation is concerned, most are likely to “pad” estimates to improve the probability of being on a budget and diminishing the risk of being late. Padding, though, reduces the chance of truly arriving at practical estimates, which is greatly needed in order to be competitive.

6. Organization Culture: Some organizations allow padding, others still oppose it. It requires time to accurately prepare estimates. It is the hurdle in effective project management.

7. Other (Non-project) Factors: Other than the above-mentioned factors that can impact the quality of a bottom-up estimate, there are various non-project factors as well like Equipment downtime, holidays, vacations, staff reduction, strikes, and legal limits that influence project estimates.

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