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

What type of projects benefit most from bottom-up estimation?

1. Projects with clearly defined objectives and tasks

2. Projects that are heavily reliant on external vendors

3. Projects with high uncertainty and variability

4. Projects that require quick completion

The correct answer is: Projects with clearly defined objectives and tasks

Bottom-up estimation is particularly advantageous for projects characterized by clearly defined objectives and tasks. This estimation technique involves breaking down a project into smaller, more manageable components or tasks. Each of these components is then estimated individually, allowing for a more accurate picture of the overall project costs and timelines. When a project has clearly defined objectives and tasks, team members can provide detailed estimates based on their expertise and familiarity with the specific activities involved. This clarity reduces ambiguity and helps in identifying potential risks and resource needs specific to each task, leading to more precise and reliable estimations. In contrast, projects that face high uncertainty and variability are often harder to assess accurately using bottom-up estimation because the specifics of tasks may not be well understood or may change frequently. Additionally, projects relying heavily on external vendors can complicate the estimation process due to reliance on third-party timelines and costs, making it less straightforward than a clearly defined project. Similarly, projects that require quick completion may not lend themselves well to the detailed task breakdown necessary for effective bottom-up estimation, as speed may necessitate broader, less detailed estimates to meet tight timelines. Thus, the benefits of bottom-up estimation shine in contexts where project elements are well-articulated, enabling more accurate and reliable forecasting of project needs and