Bottom-up estimation
Should cost modelling, Development Guidance, Version 1.0, published by Government Commercial Function in May 2021 states: ‘This takes cost estimates from the lowest (bottom) level and rolls them up to produce an overall expectation of the total cost for the service, project or programme. Here, benchmark costs or historical actuals are used to provide a granular, detailed profile of costs that are then aggregated into a complete cost profile (see IPA’s Best practice in benchmarking for further information on benchmarking). This estimation technique can be time consuming although can provide a higher degree of accuracy than other approaches.’
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