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About this lesson
The most commonly used techniques for creating project estimates are analogous estimates, bottom-up estimates, three-point estimates, and using a parametric model.
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Quick reference
Estimating Techniques
The most commonly used techniques for creating project estimates are analogous estimates, bottom-up estimates, and using a parametric model. All of these techniques rely on some level of expert judgment and at least a tentative plan for how the work will be done.
When to use
Estimates are used when planning a project or when replanning a project due to a change. This will occur at the beginning of a project or project phase.
Instructions
There are many techniques that can be used. Listed below are the most common:
Analogous estimate
This technique bases the estimate on the experience of a similar project. It relies on someone having done this type of work before. This is a very quick technique, but the estimate is very dependent upon who is doing the estimating and their experiences.
Bottom-up estimate
This estimate requires that the activities of the project be decomposed into very small “micro-tasks.” Smaller tasks are usually easier to estimate accurately because all of the work is understood and you can normally find someone who has done a similar “micro-task” and can provide you with an analogous estimate. An entire project estimated in this manner will have an accurate estimate, but it can take a long time – sometimes months – to decompose all the tasks into “micro-tasks”.
Parametric model
In this case, the experience of many projects has been codified into a formula. The formula uses one or two parameters that are easily determined during project planning. By entering these parameters into the formula, a cost estimate or time estimate is derived. For instance, the time estimate on a shipping task may use a distance parameter in the formula.
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