What cost estimating approach uses the work breakdown structure to create a cost estimate?

The correct answer is B. Definitive. The Definitive estimate (Choice B), also known as bottom-up estimating, uses the WBS to build a cost estimate. The process involves identifying every work package in the WBS, estimating the cost of each individual work package, and then rolling those estimates up through the WBS

Program Cost Management

Question

Options

AAnalogous
BDefinitive
CTop down
DParametric

How the community answered

(22 responses)

B
95% (21)
D
5% (1)

Explanation

The Definitive estimate (Choice B), also known as bottom-up estimating, uses the WBS to build a cost estimate. The process involves identifying every work package in the WBS, estimating the cost of each individual work package, and then rolling those estimates up through the WBS hierarchy to arrive at a total program or project cost. This produces the most accurate estimates but also requires the most time and effort. Analogous estimating (A) uses historical data from similar past projects. Top-down estimating (C) starts with an overall figure and allocates downward. Parametric estimating (D) uses statistical relationships between variables (e.g., cost per unit) rather than the WBS structure.

Topics

#Cost Estimating#Work Breakdown Structure (WBS)#Estimating Techniques#Program Cost Management

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