## Apportioning

PM Milestone Project Management Templates

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Also known as top-down estimating, apportioning begins with a total project estimate, then assigns a percentage of that total to each of the phases and tasks of the project. The work breakdown structure provides the framework for top-down estimating (as shown in Figure 8.2). Making useful top-down estimates relies on some big assumptions, among them:

• Since apportioning is based on a formula derived from historical data of other, similar projects, the historic projects must be very similar to the project at hand for the formula to be accurate.

• Since apportioning divides a total project estimate into smaller pieces, it will be accurate only if the overall estimate is accurate.

Although apportioning is rarely as accurate as a bottom-up estimate, it is an appropriate technique for selecting which projects to pursue. Despite its wide accuracy variance, it allows a project selection

• Some types of projects break into consistent proportions.

• Firms that have developed standard work breakdown structure templates use past projects to create the apportioning formula.

• With a good high-level estimate, the formula shows how big each of the project phases and tasks should be.

• For example, if the total budget estimate is \$40,000, that leaves \$8,000 for requirements, \$8,000 for design, and \$24,000 for construction.

FIGURE 8.2 Work breakdown structure as a basis for apportioning.

committee to approximate the length of project phases; this information then helps the committee decide which projects can be initiated and executed during a given budget period (see Table 8.2).

Apportioning is a valuable technique when used in conjunction with phased estimating. During phase reviews, the formula for apportioning can use the figures from the actual cost/effort of completed phases to increase the accuracy of the order-of-magnitude estimate (see Figure 8.3). For instance, if the original top-down estimate dictated a phase-one cost of \$75,000, and the actual phase-one cost was \$60,000, this means that the overall project estimate should be reduced by 20 percent. Again, notice the need for an accurate apportioning formula.

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