Parametric Estimating

Parametric estimating is a technique that uses a statistical relationship between historical data and other variables (e.g., square footage in construction, lines of code in software development, required labor hours) to calculate a cost estimate for a schedule activity resource. This technique can produce higher levels of accuracy depending upon the sophistication, as well as the underlying resource quantity and cost data built into the model. A cost-related example involves multiplying the planned quantity of work to be performed by the historical cost per unit to obtain the estimated cost.