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You have been hired as a contract project manager for Tech Perfect Inc. The project has already been started. Sufficient details of the project have already been structured. You are working with your team for cost estimation of the project. Which of the following estimating techniques will you use for the highest degree of accuracy?
According to the question, you have to use the estimating technique that has a higher
degree of accuracy. The most accurate estimating
technique is bottom-up estimating.
What is bottom-up estimating?
Bottom-up is a cost estimating technique that involves estimating the cost of individual work
packages or schedule
activities with the lowest level of detail. The detailed cost is rolled up (or summarized) to higher
levels for total project
estimates. This summarized data is very useful for reporting and tracking purposes. Bottom-up
estimating provides a
higher degree of accuracy, provided the estimates at the work package level are accurate.
Answer options C, A, and B are incorrect. Parametric modeling and analogous estimating techniques
use top-down estimation model. These
are less accurate than the bottom-up estimation.
What is analogous estimating?
Analogous is an estimating technique that uses the values of parameter, such as scope, cost, budget,
and duration or
measures of scale such as size, weight, and complexity from a previous, similar activity as the basis
for estimation of the
same parameter for a future activity. It is a top-down estimating technique and is a form of expert
judgment. It provides a
lower degree of accuracy than other estimating techniques. This technique is primarily used when
there is a limited amount
of detailed information about the project or program.
What is parametric modeling?
Parametric modeling is an estimating technique that uses parameters, or project characteristics, to
forecast project costs.
It involves a top-down approach and is similar but more accurate than analogous estimating. It uses
historical data and
other variables to calculate an estimate for activity parameters, such as scope, cost, budget, and
duration.