Parametric estimation example
Steven is the project manager assigned to the tight budget project. The project must be completed within the budget as per the senior management. Steven is working with an estimating mathematical model, in which formulas are used for cost and time estimates. The technique uses the mathematical formulas and statistical relationships that Steven is employing based on the historical data from other projects to estimate cost. This technique is known as?
A. Analogous.
B. Parametric.
C. Bottom-up.
D. 3-point estimation.
Answer: Option B is correct.
Parametric estimation is the correct answer.
- Parametric estimating: In this estimating mathematical model, formulas are used for cost and time estimates. The level of accuracy is better in this method. To calculate the estimate duration’s data similar to number of lines of code per hour, number of defects per cycle may be used. It can be applied to the entire project or specific parts of the project.
- Analogous estimation: This estimate uses the information from similar projects which is done before, with the same size, complexity, scope and budget, schedule and it uses the estimate for the current project. One drawback of this estimation is, it is less accurate. This estimation is used during the earlier stages of the project when limited information is available. It uses historical information and expert judgment for estimation. It is known as top-down approach.
- Bottom-up estimating: This method is used to estimate the project schedule, project cost by summing up all the resources from the bottom of WBS. Breaking the activities into smaller pieces, and then adding the resources from the bottom.
3 point estimating:
- This estimating method considers the project uncertainty and risks while estimating. It uses most likely, optimistic and pessimistic ranges.
- Most likely: This estimate may happen.
- Optimistic: This estimate activity duration represents the best-case scenario for the activity. Pessimistic: This estimate duration represents the worst-case case scenario for the activity.