Cost estimating requires the use of quantitative as well as including the relevancy of qualitative data to provide context for the cost estimate. In this video, learn how to recognize the appropriate application of qualitative data and the value it offers for the estimate and the three commonly applied quantitative data types.
- You'd be happy if I say it's warm outside. … But saying it's warm doesn't help you decide … whether to wear a T-shirt or a light sweater. … It'd be easier if I said it's 80 degrees and sunny. … What I said first is an interpretation of the weather. … The second is much more precise. … This clearly shows the difference … between qualitative and quantitative data. … Qualitative data is descriptive. … Analysts refer to qualitative data as nominal data, … and it describes program items or project quality. … The issue with qualitative data is it's usually subjective … and ambiguous, just like saying it's warm outside. … My warm and your warm will differ. … But quantitative data solves this issue. … It's objective because it uses precise criteria and labels. … When I provide quantitative descriptors … like the 80 degrees about how warm it is, … you can make a more informed decision on what to wear. … But how does this apply to cost estimating? … Let's say you wanted to build a house … and wanted an accurate estimate. …
- 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.