Estimating Techniques

Question	Answer
What are the types of estimating techniques?	Comparative (analogous) Bottom- up (analytical) Parametric Three-point
Describe comparative estimating	Uses historical data from similar projects to extrapolate estimates for new work. Past estimates are scaled according to scope and complexity to produce new estimates. Most appropriate when data available from a few previous projects
Describe bottom-up or analytical estimating	Uses a detailed specification to estimate time and cost for each component of the work. Not possible during early stages of a project.
Describe parametric estimating	Multiplies the known number of units by the price of those units. Relatively quick method. Requires large data set of past estimates of similar work. Small base data errors escalate to major errors later in the project.
Describe three-point estimating	Removes vagaries of single point estimates. Uses a best case, worst case and most likely case estimate for cost or duration. Calculated using PERT formula (Program Evaluation and Review Technique)
What is the PERT formula?	Best estimate = (1 x best case) + (4 x most likely case) + (1 x worst case) / 6
Describe Monte Carlo analysis	Uses multiple three-point estimates to calculate a statistical estimate by running a computer statistical analysis. Three-point estimating forms the basis of quantitative modelling.

Resource summary

	Created by Althea Green over 8 years ago