What cost estimating technique is suitable when an estimate is needed quickly, and moderate subjectivity can be accepted?

What cost estimating technique is suitable when an estimate is needed quickly, and moderate subjectivity can be accepted?

• A. Analytical
• B. Parametric
• C. Top-down
• D. Bottom-up

Answer: (B)

The parametric cost estimating technique is well-suited for situations where a quick estimate is required and some level of subjectivity is acceptable. This method relies on statistical relationships between historical data and other variables to produce cost estimates. By using these correlations, estimators can generate rapid estimates based on available data, making it efficient for situations where time constraints are significant. In parametric estimating, factors such as unit costs and productivity rates can be multiplied by the estimated quantity of work to provide a quick overall cost. This approach is particularly useful for projects with similar past data available, allowing estimators to draw on established trends without delving into extensive detail or requiring line-item breakdowns. The flexibility inherent in parametric methods allows for a balance between speed and accuracy, catering to cases where precise data may not be available but a generalized knowledge of costs can still guide decision-making effectively. In contrast, other techniques such as bottom-up estimating involve a detailed breakdown of costs, which can be time-consuming, and analytical methods require thorough analysis that may not be feasible under tight timelines.

The parametric cost estimating technique is well-suited for situations where a quick estimate is required and some level of subjectivity is acceptable. This method relies on statistical relationships between historical data and other variables to produce cost estimates. By using these correlations, estimators can generate rapid estimates based on available data, making it efficient for situations where time constraints are significant.

In parametric estimating, factors such as unit costs and productivity rates can be multiplied by the estimated quantity of work to provide a quick overall cost. This approach is particularly useful for projects with similar past data available, allowing estimators to draw on established trends without delving into extensive detail or requiring line-item breakdowns.

The flexibility inherent in parametric methods allows for a balance between speed and accuracy, catering to cases where precise data may not be available but a generalized knowledge of costs can still guide decision-making effectively. In contrast, other techniques such as bottom-up estimating involve a detailed breakdown of costs, which can be time-consuming, and analytical methods require thorough analysis that may not be feasible under tight timelines.