Project Management Institute (PMI) Professional in Business Analysis Practice Exam

What approach is essential for effective bottom-up estimation?

1. A detailed analysis of project risks

2. A clear understanding of the work breakdown structure

3. A reliance on expert judgment

4. A focus on high-level project objectives

The correct answer is: A clear understanding of the work breakdown structure

A clear understanding of the work breakdown structure (WBS) is essential for effective bottom-up estimation because the WBS serves as a foundational tool that organizes the project's deliverables into smaller, more manageable components. This structured breakdown allows project managers and team members to estimate the time, resources, and costs associated with each component in a detailed manner. When using a bottom-up estimation approach, estimators assess each individual task within the WBS to develop accurate estimates for the entire project. This granularity ensures that all aspects of the project are considered, reducing the likelihood of overlooking critical tasks that could lead to underestimating overall costs or timelines. The WBS not only facilitates comprehensive estimations but also enhances communication among stakeholders by providing a clear framework for understanding the project's scope and the interrelationships between different components. In contrast, while approaches such as expert judgment or analyzing project risks can contribute valuable insights, they do not provide the foundational structure necessary for a bottom-up approach. High-level project objectives focus on overarching goals rather than the specifics needed for precise estimations. Thus, without a well-defined WBS, the bottom-up estimation process would lack the clarity and direction needed to create reliable and actionable estimates.