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Guide on Analogous Estimating: PMP Cost Estimating

Analogous Estimating is a critical concept in the PMP exam, deriving from the PMBOK Guide Seventh Edition. It is defined as a technique that uses the values of parameters from previous similar projects to estimate the cost or duration of the current project.
It's often referred to as 'Top-down' estimating and it can be applied to the total project or to segments of a project, usually making use of historical data.
How it works: Project managers and team members review past projects that are similar and use the actual cost or duration of those projects to give bid estimates for the current project.
'+'Why it's important: It provides a quick and less costly method for estimation, especially during the early stages of a project. It helps to narrow down the cost or duration estimates with minimum information about the project.
Exam Tips:
1. Understand what Analogous Estimating is: Understanding the concept is key. If you know that it is based on historical data and used for quick estimations, you can easily identify the correct answers.
2. Relate it to real-world scenarios: Practical application helps you to answer scenario-based questions. You might face situations where you need to decide when to use Analogous Estimating.
3. Remember its limitations: It is less accurate than other methods because it assumes past project estimates are applicable to the new project.
If the question implies the need for a fast and comparatively accurate estimate, or if there is a past similar project, Analogous Estimating might be the best choice.

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Analogous Estimating practice test

Analogous estimating is a cost estimation technique in which the cost of a project, activity, or work package is determined by applying historical cost information from analogous (similar) projects. This technique is commonly used when there is limited data available for the current project. It relies on the expert judgment of the project team, usually based on their experience with similar projects. The core rationale is that the scope, complexity, and risks associated with the current project tend to be comparable to those of the prior projects, allowing extrapolation of realistic cost estimates. Analogous estimating is generally less accurate than parametric estimating and other methods but can provide a quick and simple way to estimate costs when resources, time, or expertise constraints are present.

Time: 5 minutes   Questions: 5

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  • Earn 35 PDUs needed for your PMP certification
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