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<ManualTopic ID="/baanerp/tp/onlinemanual/000330" xml:lang="en">
	<Header>
		<Title xmlns:ssa="http://www.ssaglobal.com" xmlns:HTML="http://www.w3.org/TR/REC-html40">To use a leading estimate type</Title>
		<Keyword><Level1>top down</Level1>
		</Keyword>
		<Keyword><Level1>bottom up</Level1>
		</Keyword>
	</Header>
	<GeneralSection><Paragraph>As a concept in <Link href="/baanerp/tp/onlinemanual/tpest" role="module">Project Estimating (EST)</Link>, <Link href="/baanerp/tp/glossary/glossary#000361" role="manual">estimate type</Link> enable you to switch between top-down estimates and bottom-up estimates. In general, if you want to estimate a project, your work direction is top down because you lack detailed information on the project cost.</Paragraph>
		<Paragraph>In an estimate, you first investigate if you can create a feasible bid for your customer. Secondly, you calculate the approximate target cost price for your project. You can use this cost amount to allocate the estimate over the required work or departments involved.</Paragraph>
	</GeneralSection>
	<ExampleSection><SectionTitle>For example</SectionTitle>
		<Paragraph>A customer requests the approximate cost of a luxurious yacht. Your shipyard considers the request for quotation. Based on experience, you know that the sales price must be approximately EUR 65 million. To build the yacht, you need the cooperation of the Project Management (PM) department and the Construction department. The PM department is required for redesigning an existing CAD drawing of a ship; this costs EUR 9 million. The Construction department requires approximately EUR 50 million to build the yacht. If the yacht is built, it will require decorating; a subcontractor carries out this job.</Paragraph>
		<Paragraph>In this example, you create the following estimate in the <GUIRef href="/baanerp/tp/est/tpest1100m000" role="session">Estimate Versions (tpest1100m000)</GUIRef> session.</Paragraph>
		<List><ListIntro>The field names and the field values are as follows:</ListIntro>
			<ListItem>Version - 1a Estimate Yacht</ListItem>
			<ListItem>Version amount - EUR 65 million</ListItem>
			<ListItem>Profit fee - EUR 5 million</ListItem>
			<ListItem>Management reserve - EUR 0 million</ListItem>
			<ListItem>Undistributed amount - EUR 60 million</ListItem>
			<ListItem>Distributed amount - EUR 0 million</ListItem>
		</List>
		<Paragraph>Top down, you define an amount for the TOP of EUR 60 million. The distributed amount becomes EUR 60 million.</Paragraph>
		<List><ListIntro>You have the following activity structure available for building the ship:</ListIntro>
			<ListItem>TOP = The yacht</ListItem>
			<ListItem>01 = Redesigning</ListItem>
			<ListItem>02 = Building ship</ListItem>
			<ListItem>03 = Decorating</ListItem>
		</List>
		<Paragraph>01, 02, and 03 are linked as child activities to the TOP.</Paragraph>
	</ExampleSection>
	<GeneralSection><SectionTitle>To structure the estimate</SectionTitle>
		<Paragraph>In general, for a starting estimate, all <Link href="/baanerp/tp/glossary/glossary#000370" role="manual">structural element</Link> have a top-down <Link href="/baanerp/tp/glossary/glossary#000362" role="manual">leading estimate type</Link>. In the <GUIRef href="/baanerp/tp/est/tpest1120m000" role="session">Structural Elements (tpest1120m000)</GUIRef> session, you can define the estimate type as top down or bottom up. The leading estimate type of a structural element determines the way the calculation of the estimate is performed. You can change the estimate type in the process.</Paragraph>
		<Paragraph>1. Enter your top-down estimate in the <GUIRef href="/baanerp/tp/est/tpest2100m000" role="session">Estimate Lines (tpest2100m000)</GUIRef> session: line number activity description estimate type line level type amount in EUR</Paragraph>
		<TABLE border="1"><TBODY><TR><TD>line 5</TD>
					<TD>TOP</TD>
					<TD>Yacht</TD>
					<TD>top down</TD>
					<TD>total</TD>
					<TD>60 mln</TD>
				</TR>
				<TR><TD>line 10</TD>
					<TD>01</TD>
					<TD>Redesigning</TD>
					<TD>top down</TD>
					<TD>total</TD>
					<TD>9 mln</TD>
				</TR>
				<TR><TD>line 20</TD>
					<TD>02</TD>
					<TD>Building ship</TD>
					<TD>top down</TD>
					<TD>total</TD>
					<TD>50 mln</TD>
				</TR>
				<TR><TD>line 25</TD>
					<TD>03</TD>
					<TD>Decorating</TD>
					<TD>top down</TD>
					<TD>total</TD>
					<TD>1 mln</TD>
				</TR>
			</TBODY>
		</TABLE>
		<Paragraph>Element 03, line 25, is subcontracted to another company. A request for quotation is sent to the subcontractor, but you estimate EUR 1 mln cost.</Paragraph>
	</GeneralSection>
	<GeneralSection><SectionTitle>Estimate lines</SectionTitle>
		<Paragraph>You must enter more detailed <Link href="/baanerp/tp/glossary/glossary#000374" role="manual">estimate line</Link>, and you must define the whole estimate structure. Some child activities, for which you know more exact bottom-up information, have the Bottom-Up leading estimate type:</Paragraph>
		<TABLE border="1"><TBODY><TR><TD>Struc. el.</TD>
					<TD>LET</TD>
					<TD>launch level type</TD>
					<TD>cost level type</TD>
					<TD>sales level type</TD>
				</TR>
				<TR><TD>TOP = The yacht</TD>
					<TD>top down</TD>
					<TD>detail</TD>
					<TD>total</TD>
					<TD>total</TD>
				</TR>
				<TR><TD>01 = Redesigning</TD>
					<TD>top down</TD>
					<TD>detail</TD>
					<TD>total</TD>
					<TD>total</TD>
				</TR>
				<TR><TD>02 = Building</TD>
					<TD>top down</TD>
					<TD>detail</TD>
					<TD>total</TD>
					<TD>total</TD>
				</TR>
				<TR><TD>03 = Decorating</TD>
					<TD>top down</TD>
					<TD>detail</TD>
					<TD>total</TD>
					<TD>total</TD>
				</TR>
				<TR><TD>011= CAD rework</TD>
					<TD>top down</TD>
					<TD>detail</TD>
					<TD>total</TD>
					<TD>total</TD>
				</TR>
				<TR><TD>021= Steel</TD>
					<TD>bottom up</TD>
					<TD>detail</TD>
					<TD>detail</TD>
					<TD>total</TD>
				</TR>
				<TR><TD>022= Yard work</TD>
					<TD>bottom up</TD>
					<TD>detail</TD>
					<TD>detail</TD>
					<TD>total</TD>
				</TR>
				<TR><TD>023= Engine</TD>
					<TD>bottom up</TD>
					<TD>detail</TD>
					<TD>detail</TD>
					<TD>total</TD>
				</TR>
			</TBODY>
		</TABLE>
		<Paragraph>011 is linked to 01. 021, 022, and 023 are linked to 02. As you can see, the 02 Building ship parent activity remains a top-down activity because of expected overhead costs.</Paragraph>
		<TABLE border="1"><TBODY><TR><TD>line number</TD>
					<TD>activity</TD>
					<TD>estimate type</TD>
					<TD>line level type</TD>
					<TD>amount in EUR</TD>
				</TR>
				<TR><TD>30</TD>
					<TD>021</TD>
					<TD>top down</TD>
					<TD>total</TD>
					<TD>30 mln</TD>
				</TR>
				<TR><TD>35</TD>
					<TD>022</TD>
					<TD>top down</TD>
					<TD>total</TD>
					<TD>15 mln</TD>
				</TR>
				<TR><TD>40</TD>
					<TD>023</TD>
					<TD>top down</TD>
					<TD>total</TD>
					<TD>2 mln</TD>
				</TR>
				<TR><TD>45</TD>
					<TD>011</TD>
					<TD>top down</TD>
					<TD>total</TD>
					<TD>5 mln</TD>
				</TR>
				<TR><TD>50</TD>
					<TD>011</TD>
					<TD>top down</TD>
					<TD>detail</TD>
					<TD>3 mln</TD>
				</TR>
				<TR><TD>55</TD>
					<TD>011</TD>
					<TD>top down</TD>
					<TD>detail</TD>
					<TD>2 mln</TD>
				</TR>
				<TR><TD>60</TD>
					<TD>02</TD>
					<TD>top down</TD>
					<TD>cost type (labor)</TD>
					<TD>4 mln</TD>
				</TR>
				<TR><TD>65</TD>
					<TD>02</TD>
					<TD>top down</TD>
					<TD>cost type (material)</TD>
					<TD>46 mln</TD>
				</TR>
			</TBODY>
		</TABLE>
	</GeneralSection>
	<GeneralSection><SectionTitle>Estimate details</SectionTitle>
		<Paragraph>Up to now, you used a top-down estimate; you just allocated amounts. However, your two internal departments involved in this project provide their own estimates for building the yacht. Based on their experience, they can provide a more detailed calculation. Enter these detailed lines in your estimate version.</Paragraph>
		<TABLE border="1"><TBODY><TR><TD>line number</TD>
					<TD>activity</TD>
					<TD>estimate type</TD>
					<TD>line level type</TD>
					<TD>amount in EUR</TD>
				</TR>
				<TR><TD>70</TD>
					<TD>011</TD>
					<TD>bottom up</TD>
					<TD>total</TD>
					<TD>5 mln</TD>
				</TR>
				<TR><TD>80</TD>
					<TD>011</TD>
					<TD>bottom up</TD>
					<TD>detail</TD>
					<TD>3 mln</TD>
				</TR>
				<TR><TD>85</TD>
					<TD>023</TD>
					<TD>bottom up</TD>
					<TD>detail</TD>
					<TD>1 mln</TD>
				</TR>
				<TR><TD>90</TD>
					<TD>022</TD>
					<TD>bottom up</TD>
					<TD>detail</TD>
					<TD>15 mln</TD>
				</TR>
				<TR><TD>95</TD>
					<TD>021</TD>
					<TD>bottom up</TD>
					<TD>total</TD>
					<TD>40 mln</TD>
				</TR>
				<TR><TD>100</TD>
					<TD>03</TD>
					<TD>bottom up</TD>
					<TD>detail</TD>
					<TD>0,5 mln</TD>
				</TR>
			</TBODY>
		</TABLE>
		<Paragraph>If you look at 011, a top-down total of EUR 5 million is expected. However, if you add up the two bottom-up detail lines of 011, that part of the ship adds up to EUR 3 million or 5 million. This depends on the level type. If you entered all necessary estimate lines, you can aggregate totals and see the estimate amounts for the leading estimate type. For the exact formulas, see the online Help in the <GUIRef href="/baanerp/tp/est/tpest2100m000" role="session">Estimate Lines (tpest2100m000)</GUIRef> session. Before you can understand the amounts that result from these calculations, you must know how the level type influences the total amounts on the estimate lines.</Paragraph>
	</GeneralSection>
	<GeneralSection><SectionTitle>To use level types</SectionTitle>
		<Paragraph>To use <Link href="/baanerp/tp/glossary/glossary#000373" role="manual">level type</Link>
		</Paragraph>
		<Paragraph>If the <Link href="/baanerp/tp/glossary/glossary#000362" role="manual">leading estimate type</Link> (LET) in the <GUIRef href="/baanerp/tp/est/tpest1120m000" role="session">Structural Elements (tpest1120m000)</GUIRef> session is Bottom Up, you can calculate estimate totals for Total and Detail level types. If the leading estimate type is Top Down for a structural element, you cannot apply level type aggregation, but you can use level types to check the consistency of top-down lines.</Paragraph>
		<List><ListIntro>SSA ERP distinguishes the following level types for a top-down estimate line:</ListIntro>
			<ListItem>Total.</ListItem>
			<ListItem>Cost Type.</ListItem>
			<ListItem>Detail.</ListItem>
			<ListItem>Other Structures.</ListItem>
		</List>
	</GeneralSection>
	<GeneralSection><SectionTitle>Top-down level types</SectionTitle>
		<Paragraph>Top down has a consistency check for top-down structural elements. Lines with different level types are used for different calculations, and are bound to rules. In the <Link href="/baanerp/tp/pdm/tppdm0101s000" role="session">User Profiles (tppdm0101s000)</Link> session you can define the calculation settings for the consistency check. In this session, you define whether the check of the <GUIRef href="/baanerp/tp/est/tpest2220m000" role="session">Verify Top-Down Estimate Consistency (tpest2220m000)</GUIRef> session is performed for each field, or for each record. By using the Level field types entered in the <GUIRef href="/baanerp/tp/est/tpest2100m000" role="session">Estimate Lines (tpest2100m000)</GUIRef> session, the check is performed in the following order:</Paragraph>
		<ProcedureList><ListItem>Total: For the Total level type, the consistency check is performed to find out whether the total amount of the structural element does not exceed the parent’s structural element amount. Example, line 10 + line 20 + line 25 must be less than or equal to line 5. In top-down estimating, you must always use a Total line.</ListItem>
			<ListItem>Cost type: For the Cost Type level type, the consistency check is performed to find out whether the amount does not exceed the Total amount of the same structural element. Example, line 60 + line 65 must be less than or equal to line 20.</ListItem>
			<ListItem>Detail: For the Detail option, the consistency check is performed to find out whether line amounts of the same cost type do not exceed the Cost Type amount with the Total level type. For example, line 50 + line 55 must be less than or equal to line 45.</ListItem>
			<ListItem>Other Structures: For the Other Structures level type, the consistency check is performed to find out whether the line amount does not exceed the amount of the structural element with the Total level type.</ListItem>
		</ProcedureList>
		<Note><SectionTitle>Note</SectionTitle>
			<Paragraph>The Cost Type - Detail lines amount check is only performed if you run the <GUIRef href="/baanerp/tp/est/tpest2220m000" role="session">Verify Top-Down Estimate Consistency (tpest2220m000)</GUIRef> session.</Paragraph>
		</Note>
	</GeneralSection>
	<GeneralSection><SectionTitle>Bottom-up level types</SectionTitle>
		<Paragraph>A bottom-up line can only have two different level types: Total and Detail. Because you just enter the costs and add them up, there is no consistency check. In the <GUIRef href="/baanerp/tp/est/tpest1120m000" role="session">Structural Elements (tpest1120m000)</GUIRef> session, you can determine which level type is used in the bottom-up estimate. The values of the Cost Level and Sales Level fields determine the lines that are aggregated for cost or sales. The Launch field’s level type determines which estimate lines linked to the defined level type are launched. If the level type setting is Total, all estimate lines of that level type are launched to the project budget.</Paragraph>
	</GeneralSection>
	<GeneralSection><SectionTitle>leading estimate type (LET) calculations</SectionTitle>
		<Paragraph><Link href="/baanerp/tp/glossary/glossary#000362" role="manual">leading estimate type</Link> (LET) calculations</Paragraph>
		<Paragraph>If you click Aggregate Totals in the <GUIRef href="/baanerp/tp/est/tpest2100m000" role="session">Estimate Lines (tpest2100m000)</GUIRef> session, the structural elements’ total amount of the leading estimate type is calculated from the estimate lines. The result is then displayed in the various LET Total fields. If you work with bottom-up estimating, the calculation also depends on your level type settings in the <GUIRef href="/baanerp/tp/est/tpest1120m000" role="session">Structural Elements (tpest1120m000)</GUIRef> session. The LET of element 011 is top down and you have three top-down lines for 011 and two bottom-up lines. Consequently, only the top-down lines are used in the LET calculation.</Paragraph>
	</GeneralSection>
	<GeneralSection><SectionTitle>Total level type calculation</SectionTitle>
		<Paragraph>In the <GUIRef href="/baanerp/tp/est/tpest2100m000" role="session">Estimate Lines (tpest2100m000)</GUIRef> session, under Cost, the following calculations of estimate lines totals are displayed. The LET is 60 million EURO; this amount depends on the view. Because the view is on the TOP element, the following value is displayed in the Top Down Total: EURO 60 million.</Paragraph>
		<Paragraph>The Bottom Up Total calculation differs; the structural elements’ amounts are added up: 011 + 023 + 022 = 5 + 15 + 1 = EURO 21 million. The Cost Level field type determines the selected amounts.</Paragraph>
		<Paragraph>For bottom-up estimating, you can also calculate a total with the Detail level type. If your level type setting in the Cost Level field type in the <GUIRef href="/baanerp/tp/est/tpest1120m000" role="session">Structural Elements (tpest1120m000)</GUIRef> session is Detail, the shipyard example amounts to the following result: 3 + 1 + 0 + 15 + 0,5 = EUR 19.5 million.</Paragraph>
	</GeneralSection>
	<GeneralSection><SectionTitle>Explanation</SectionTitle>
		<Paragraph>If you look at the bottom-up lines of 011, there is a difference in amount; the Total line is calculated with some slack, whereas the Detail lines are accurate labor hours. If the Cost Level field type is Detail, the total for 011 is 3 million plus the other detail lines for 011, if available.</Paragraph>
		<List><ListIntro>Detail level-type calculation for leading estimate type (LET):</ListIntro>
			<ListItem>LET of 01 = top down =&gt; estimate is EUR 9 million.</ListItem>
			<ListItem>LET of 021 = bottom up =&gt; estimate is EUR 40 or EUR 30 million, depending on the Cost Level field.</ListItem>
			<ListItem>LET of 03 = top down =&gt; estimate is EUR 1 million.</ListItem>
		</List>
		<Paragraph>You can use the LET total and the cost total to calculate and recalculate different estimates before you send out a bid. The aim is to create a cost estimate. With the same estimate, you can present a sales estimate with the required level of detail.</Paragraph>
	</GeneralSection>
	<RelatedTopics><SectionTitle>Related topics</SectionTitle>
		<RelTopic><Link href="/baanerp/tp/onlinemanual/000315" role="manual">To create an estimate</Link>
		</RelTopic>
	</RelatedTopics>
</ManualTopic>
