Which cost estimating approach is a statistical or top down approach?

Which cost estimating approach is a statistical or top down approach?

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

Answer: (A)

Parametric estimating relies on statistical relationships between cost drivers and total cost, using historical data to build equations that predict cost from a few variables. Because it turns a project’s characteristics into an overall cost via a mathematical model, it’s a top-down approach that yields a quick, aggregate estimate rather than detailing every component. This makes it especially useful when you have reliable data for similar projects and need an early or scalable estimate. The other methods don’t fit this pattern: using a prior project as a baseline (analogy) relies more on a simple comparison rather than a statistical model; building the estimate from detailed components (engineering) is bottom-up; and relying on expert consensus (Delphi) aggregates judgment without a formal statistical relationship.

Parametric estimating relies on statistical relationships between cost drivers and total cost, using historical data to build equations that predict cost from a few variables. Because it turns a project’s characteristics into an overall cost via a mathematical model, it’s a top-down approach that yields a quick, aggregate estimate rather than detailing every component. This makes it especially useful when you have reliable data for similar projects and need an early or scalable estimate.

The other methods don’t fit this pattern: using a prior project as a baseline (analogy) relies more on a simple comparison rather than a statistical model; building the estimate from detailed components (engineering) is bottom-up; and relying on expert consensus (Delphi) aggregates judgment without a formal statistical relationship.