Which cost estimating approach uses statistical relationships between cost and driving factors like size?

Which cost estimating approach uses statistical relationships between cost and driving factors like size?

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

Answer: (A)

Parametric estimation relies on statistical relationships between cost and driving factors such as size. By analyzing historical data, you establish a model where cost is a function of measurable factors (for example, cost = a × Size^b), then apply that relationship to new programs to generate quick, scalable estimates. This approach is particularly useful when you don’t have detailed designs yet, but you can quantify size or other drivers. Other methods either depend on expert judgment (Delphi), require detailed engineering data and analysis (Engineering Approach), or use costs from past similar programs without a formal statistical model (Analogy).

Parametric estimation relies on statistical relationships between cost and driving factors such as size. By analyzing historical data, you establish a model where cost is a function of measurable factors (for example, cost = a × Size^b), then apply that relationship to new programs to generate quick, scalable estimates. This approach is particularly useful when you don’t have detailed designs yet, but you can quantify size or other drivers. Other methods either depend on expert judgment (Delphi), require detailed engineering data and analysis (Engineering Approach), or use costs from past similar programs without a formal statistical model (Analogy).