Analogous Cost Estimating
Analogous cost estimating uses the cost of a previous, similar project or activity as the basis for estimating the cost of the current project or activity.
Explanation
Analogous estimating, also called top-down estimating, relies on historical data from similar projects to produce cost estimates. It uses parameters such as scope, cost, budget, duration, and complexity from a previous project as the basis for estimating the same parameters for the current project.
This technique is most reliable when previous projects are similar in fact and not just in appearance, and when the individuals preparing the estimates have the needed expertise. It is typically used when there is limited information about the current project, such as in the early phases.
Analogous estimating is generally less costly and less time-consuming than other techniques but is also less accurate. It can be applied to an entire project or to segments of a project and may be used in combination with other estimating methods.
Key Points
- •Also known as top-down estimating
- •Uses historical data from similar projects
- •Less costly and time-consuming but less accurate
- •Best used in early project phases when detail is limited
Exam Tip
Analogous estimating is quick and inexpensive but least accurate. It relies on expert judgment and historical similarity. Think "top-down" when you see analogous.
Frequently Asked Questions
Related Topics
Parametric Cost Estimating
Parametric cost estimating uses a statistical relationship between historical data and other variables to calculate a cost estimate for project work.
Bottom-Up Cost Estimating
Bottom-up cost estimating involves estimating the cost of individual work packages or activities and then aggregating those estimates to arrive at a total project cost.
Estimate Costs
Estimate Costs is the process of developing an approximate monetary assessment of the resources needed to complete project activities.
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