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Budgeting and Network

Compare and contrast the bottom-up budgeting process with the top-down budgeting process. Make sure to discuss their advantages and disadvantages in regard to estimating project budgets and when it is appropriate to use each process.

Explain what must be identified in order to construct a network. What are the strengths and weaknesses of AOA and AON techniques?

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Top-down Budgeting versus Bottom-up Budgeting
Budgeting is an important aspect of project management. There are two approaches of budgeting- top-down and bottom-up. Top-down approach is most widely used in contemporary project management. In this budgeting all directions come from the top beginning with establishing project objectives by the top management.

Top management is responsible for providing direction, guidelines, information and plan to project participants. It can however lead to ambiguity due to which chances of project failure are high unless there is open and clear communication across all levels.

Advantages
- Budget allocations are completely handled by top management
- It ensures that budget remains on track as specific accounting process is followed
- It is mostly used by organizations for which even small cost overruns can be damaging

Disadvantages
- Employees can become frustrated leading to lower productivity
- There can be slowdown in ...

Solution Summary

This is a comparison of two types of budgeting and types of network diagram.

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