Which cost estimating approach is based on direct comparison with historical information?

Which cost estimating approach is based on direct comparison with historical information?

• A. Engineering Approach
• B. Parametric Approach
• C. Analogy Approach
• D. Delphi Method

Answer: (C)

The concept being tested is estimating by comparing to a past project. The analogy approach uses direct comparison with historical information—you find a completed project that’s similar in scope and complexity and use its actual cost as a baseline, then adjust for differences like size, location, inflation, and any changes in scope or materials. For example, if you’re estimating the cost to build a new warehouse, you’d look at a recently finished warehouse with similar features and size, take its actual cost, and adjust for any differences between the two projects. This approach is fast and intuitive, especially in early planning when detailed data isn’t yet available. This differs from engineering planning, which builds costs from first principles based on required functions; parametric methods use mathematical relationships derived from data but aren’t a direct one-to-one comparison with a specific past project; and the Delphi method relies on rounds of expert judgment rather than historical project costs.

The concept being tested is estimating by comparing to a past project. The analogy approach uses direct comparison with historical information—you find a completed project that’s similar in scope and complexity and use its actual cost as a baseline, then adjust for differences like size, location, inflation, and any changes in scope or materials.

For example, if you’re estimating the cost to build a new warehouse, you’d look at a recently finished warehouse with similar features and size, take its actual cost, and adjust for any differences between the two projects. This approach is fast and intuitive, especially in early planning when detailed data isn’t yet available.

This differs from engineering planning, which builds costs from first principles based on required functions; parametric methods use mathematical relationships derived from data but aren’t a direct one-to-one comparison with a specific past project; and the Delphi method relies on rounds of expert judgment rather than historical project costs.