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Guide to Parametric Estimating

What is Parametric Estimating?
Parametric estimating is a forecasting technique which uses statistical methods to predict cost and duration based on historical data and project parameters.

Why is it important?
Parametric Estimating allows for accurate and reliable forecasts, which lead to effective project planning and management. It also helps identify key cost drivers and areas of risk in the project.

How does it work?
Parametric Estimating involves the following steps:
1. Identify a parameter that accurately predicts the cost or duration
2. Collect historical data for the parameter
3. Determine a statistical relationship between the parameter and cost or duration and create a mathematical model
4. Use the model and the estimated value of the parameter to forecast the cost or duration.

How to answer questions on Parametric Estimating in an exam:
1. Understand the parametric estimating process and principles.
2. Use real-life examples to demonstrate your understanding
3. Show how the method can be applied to specific project scenarios.

Exam Tips: Answering Questions on Parametric Estimating:
1. Make sure you understand the concept and technique of Parametric Estimating
2. Familiarize yourself with different types of project parameters and how they can affect cost and duration
3. Practice using different statistical methods for determining relationships
4. Prepare to explain why Parametric Estimating is effective and important in project management.

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Parametric Estimating practice test

Parametric estimating is a technique that uses statistical modelling to develop a cost estimate. It uses a set of parameters - factors that are likely to impact the estimate, such as the size of the product, the complexity of the work, the skills of the team and so forth - and uses these to develop a mathematical model. From this, a range of estimates can be generated. The strength of the parametric estimating technique is that it both recognizes and quantifies the inherent uncertainty in any estimate.

Time: 5 minutes   Questions: 5

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