Which Cost Estimating approach makes statistical inferences about Cost Estimating Relationships between costs and system characteristics?

Which Cost Estimating approach makes statistical inferences about Cost Estimating Relationships between costs and system characteristics?

• A. Engineering Approach
• B. Bottom-Up Detail Method
• C. Parametric Approach
• D. Analogous Estimation

Answer: (C)

Parametric estimation uses statistical inferences about how cost relates to driving characteristics of a system. By building Cost Estimating Relationships from historical data, you fit a model—often through regression—that links cost to measurable drivers like weight, size, or performance parameters. Once the relationship is established, you estimate the cost of a new design by plugging in its characteristic values and can also quantify uncertainty with confidence intervals. This approach is especially useful in early design or for rapid comparisons, because it leverages existing data to predict costs without detailing every component. The other methods rely on different principles: an engineering approach derives costs from physics or engineering principles; a bottom-up detail method sums costs of individual components and activities; and analogous estimation uses the cost of a similar past system as a rough proxy without formal statistical modeling.

Parametric estimation uses statistical inferences about how cost relates to driving characteristics of a system. By building Cost Estimating Relationships from historical data, you fit a model—often through regression—that links cost to measurable drivers like weight, size, or performance parameters. Once the relationship is established, you estimate the cost of a new design by plugging in its characteristic values and can also quantify uncertainty with confidence intervals. This approach is especially useful in early design or for rapid comparisons, because it leverages existing data to predict costs without detailing every component.

The other methods rely on different principles: an engineering approach derives costs from physics or engineering principles; a bottom-up detail method sums costs of individual components and activities; and analogous estimation uses the cost of a similar past system as a rough proxy without formal statistical modeling.