Which estimating technique is most accurate

The cost estimates are then calculated by multiplying the resource units with the time and the price per unit. This section discusses a practical example of the application of the bottom-up estimation technique. The example is based on the following work breakdown structure:. The work package owners are asked to estimate the resource needs headcount , the duration and the total costs for each activity under their work package. The following figure shows the granular estimates for the activities, their aggregation to the work package level and the entire project.

The requirements management team, for instance, might have used analogous estimating. In that case, they estimated their resource, time and budget needs based on observed values from previous workshops and specifications. The testing team, on the other hand, might know how many test cases a person usually creates per day and how many cases a team member normally completes per day. They multiply these parameters with the number of expected test cases in the current project, i.

The light-blue rows in the above table show the estimates on the work package level i. The dark-blue lines represent the second level of aggregation — the sum of resources, costs and duration on a phase level equivalent level to that of deliverables in other WBS types.

Note that the numbers of headcount and time are only the sums of the respective granular estimates. In reality, the headcount might be lower as some team members could work in different activities and work packages.

For instance, a business analyst who writes specifications could also be deployed for testing in a later project phase.

The sum of the duration estimates of all activities does not necessarily equal the total duration of the project. This is because scheduling may lead to parallel activities or waiting time that is not estimated on the activity level. The estimate accuracy is an indication of the degree to which the final actual cost outcome for a given project varies from its estimated cost.

It is important to understand that an estimate should never be regarded as a single point number or cost but as a range of potential cost outcomes and associated probabilities of occurrence. Once we know the scope of our project, the current phase of our project and the accuracy that we expect our estimate to have, we can decided on which estimating technique best fits the situation.

The most important estimate methodologies are factor estimating, parametric estimating and detailed estimating:. Factor estimating, also known as top-down estimating, is based on limited project scope. It is generally used in the identification phase. It uses rules of thumb, parametric models or historical databases to provide relevant cost data. Parametric estimating entails the analysis of costs and identification of cost drivers to develop cost models. The approach essentially correlates cost and manpower information with parameters describing the item to be costed.

This process is used in the earlier phases of a project identification and definition when there is not much specific information about the project, but there is historical data from previous similar projects. Detail Estimating, also called bottom-up estimating , is used when the maturity level of project definition is high execution and operational phase. Detailed estimates are made at relatively low levels in the work breakdown structure, typically at work package or task level.

Analogous estimating uses a similar past project to estimate the duration or cost of your current project. Products By Bayt.

Use Our Mobile App. Get Fresh Updates On your job applications, and stay connected. Download Now. Start networking and exchanging professional insights Register now or log in to join your professional community. Follow Most accurate estimate of project can be obtained by:- a. Analogous Estimating b.