Which cost estimating technique uses historical data from similar projects?

Which cost estimating technique uses historical data from similar projects?

• A. Parametric cost estimating technique
• B. Analogy cost estimating technique
• C. Engineering cost estimating technique
• D. Actual Costs

Answer: (B)

Analogous cost estimating uses historical data from similar projects to forecast what your current project will cost. By identifying a past project with a similar scope, you take its actual cost as a baseline and adjust for differences in size, complexity, location, inflation, and other factors. This approach is especially helpful early in planning when details are scarce, because it provides a quick, experience-based estimate grounded in real previous experience. As more specifics become available, you can move to more precise methods, but starting with what has happened before gives a solid, practical starting point. Other methods rely on different approaches: a parametric technique builds a model from unit costs or cost drivers derived from data, engineering cost estimating uses detailed quantities and unit costs from designs, and actual costs refer to costs already incurred rather than a forecast approach.

Analogous cost estimating uses historical data from similar projects to forecast what your current project will cost. By identifying a past project with a similar scope, you take its actual cost as a baseline and adjust for differences in size, complexity, location, inflation, and other factors. This approach is especially helpful early in planning when details are scarce, because it provides a quick, experience-based estimate grounded in real previous experience. As more specifics become available, you can move to more precise methods, but starting with what has happened before gives a solid, practical starting point.

Other methods rely on different approaches: a parametric technique builds a model from unit costs or cost drivers derived from data, engineering cost estimating uses detailed quantities and unit costs from designs, and actual costs refer to costs already incurred rather than a forecast approach.