The parametric estimating approach is one of the more accurate techniques for determining a project's duration and cost and is commonly used as it's fairly easy to use. In this video, learn why it is frequently used for cost-estimating and how to apply specific parameters using the parametric approach.
- Let's get into more detail with the parametric approach. … This approach is one of the most accurate techniques … for determining a project duration and cost, … analysts like it, because it's fairly easy to use … and to implement. … You may notice parametric implies the word parameter … and parameters are simply specifications … or criteria for each item you're costing. … Parameters will include published information … about the hours and costs of the work or item to purchase. … It may not be exactly the parameter you require, … but chances are they closely compare it to what you need … to cost your effort. … Allow me to share an example. … Let's say an analyst wants to estimate … the cost of building a six-story office tower. … The analysts would consult an estimating publication … for buildings and look up the cost of constructing … a six-story building. … These are books or even databases … of records on these costs. … Companies keep track of these things, … garments consulted, really it's a good place to start. …
- Describe the limitations in reaching 100 percent accuracy in cost estimates.
- Differentiate between nominal, ratio, and ordinal data.
- Relate the reason for credible cost estimates to a company’s business needs.
- Determine situations in which a business would use the top-down estimating approach.
- Examine the validity of data and data collection given a scenario.
- Explore the differences between cost, value, and performance.