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Guide: Parametric Estimating in CAPM Estimation Techniques

Parametric Estimating:
Parametric Estimating is a technique used in the Cost Estimating and Assessment Guide to predict a project’s cost and duration through statistical modeling. By linking various project parameters to the cost and duration, one can quickly gauge the impact of change in any parameter on the project’s outcome.

Importance:
Parametric estimation plays a critical role in project management and cost estimation as it helps in predicting the cost and timeframe in a statistically significant manner. It also accounts for risk and uncertainty, thereby providing a more accurate and reliable estimate.

How It Works:
Parametric estimating works by establishing a statistical relationship between historical data and other variables (or parameters). For instance, you might calculate the cost of painting a room by determining the cost per square foot and the size of the room.

Responses to Questions about Parametric Estimating in Exams:
When answering questions about parametric estimating in exams, ensure to first explain what the approach is and emphasize its importance in managerial decision-making. Then, detail how it works, being sure to include relevant examples to demonstrate your understanding.

Exam Tips:
1. Understand the basic formula used in parametric estimating and be ready to apply it in situational problems.
2. Look out for words like 'parameters', 'variables' or 'statistical relationship' in the exam question – these are clues that parametric estimating may be the answer.
3. Always clarify how the data used in the estimation is obtained and reference any assumptions made.
4. The best answers will not only identify the cost/duration of a project but also explain how changes in input parameters can affect the estimate.

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Parametric Estimating practice test

Parametric estimating involves using statistical modeling to make predictions. In this method, characteristics of the project (parameters) are represented in a mathematical model to predict project costs, resources, duration etc. The accuracy of the model depends on the quality and relevance of the data used. This method works best when the project parameters are quantifiable and can be reliably forecasted through the model. For instance, cost per square foot to build a commercial building.

Time: 5 minutes   Questions: 5

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  • 8521 Superior-grade Certified Associate in Project Management practice questions.
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  • Unlock Effortless CAPM preparation: 5 full exams.
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  • Risk-Free Decision: Start with a 7-day free trial - get premium features at no cost!