To structure the estimate

To create an estimate, the structural element with a top-down leading estimate type is required. In the Structural Elements (tpest1120m000) session, you can define the estimate type as top down or bottom up. The leading estimate type of a structural element determines the method of calculation of the estimate and you can also modify the estimate type.

Enter your top-down estimate in the Estimate Lines (tpest2100m000) session such as the line number, activity, description, estimate type, line level type, and amount in EURO.

Line 5	TOP	Yacht	Top down	Total	60 million
Line 10	01	Redesigning	Top down	Total	9 million
Line 20	02	Building ship	Top down	Total	50 million
Line 25	03	Decorating	Top down	Total	1 million

Element 03, Line 25, is subcontracted to another company. A request for a quotation is sent to the subcontractor, but the estimate for the cost is EURO 1 million.

Estimate lines

You must specify detailed estimate lines and you must define the entire estimate structure. Child activities, for which more bottom-up information is available, use the Bottom-Up leading estimate type option:

Structural Element	LET	Launch Level Type	Cost Level Type	Sales Level Type
TOP = The yacht	top down	detail	total	total
01 = Redesigning	top down	detail	total	total
02 = Building	top down	detail	total	total
03 = Decorating	top down	detail	total	total
011= CAD rework	top down	detail	total	total
021= Steel	bottom up	detail	detail	total
022= Yard work	bottom up	detail	detail	total
023= Engine	bottom up	detail	detail	total

The structural element 011 is linked to 01. The structural element 021, 022, and 023 are linked to 02. Based on the linking, the 02 Building ship parent activity remains a top-down activity because of expected overhead costs.

Line number	Activity	Estimate Type	Line Level Type	Amount in EURO
30	021	top down	total	30 million
35	022	top down	total	15 million
40	023	top down	total	2 million
45	011	top down	total	5 million
50	011	top down	detail	3 million
55	011	top down	detail	2 million
60	02	top down	cost type (labor)	4 million
65	02	top down	cost type (material)	46 million

Estimate details

In the example, a top-down estimate is used and amounts are allocated. However, the two internal departments involved in this project provide their own estimates for building the yacht. Based on their evaluation, they provide a more detailed calculation. Specify these lines and the related details in the estimate version.

Line number	Activity	Estimate Type	Line Level Type	Amount in EURO
70	011	bottom up	total	5 million
80	011	bottom up	detail	2.7 million for engineering
81	011	bottom up	detail	0.3 million for project management
85	023	bottom up	detail	1 million
90	022	bottom up	detail	15 million
95	021	bottom up	total	40 million
100	03	bottom up	detail	0.5 million

If you view the details of the activity 011, a top-down total of EURO 5 million is expected. However, if you add the two bottom-up detail lines of 011, that part of the ship adds up to EURO 3 million or 5 million, depending on the Line Level Type. If all required estimate lines are specified, you can aggregate the totals and view the estimate amounts for the leading estimate type. For the formulas, refer to Estimate Lines (tpest2100m000) session.