Parametric Estimating
An estimating approach that applies mathematical models or unit rates to historical data and specific project parameters to forecast total cost or duration.
Key Points
- Uses measurable drivers (e.g., cost per unit, hours per feature) multiplied by quantities to produce estimates.
- Depends on reliable historical data and clearly defined parameters for accuracy.
- Models can be simple linear rates or more complex algorithms with multiple variables.
- Often more accurate than analogous estimating when the scope and parameters are well understood.
Example
A construction team estimates flooring installation using a rate of $12 per square foot based on past projects. For 8,000 square feet, the cost estimate is 8,000 x $12 = $96,000. They adjust the rate by +10% for a premium material, resulting in $105,600.
PMP Example Question
Which estimating technique derives total effort by multiplying historical productivity rates by the number of units to be produced?
- Analogous estimating
- Parametric estimating
- Bottom-up estimating
- Three-point estimating
Correct Answer: B — Parametric estimating
Explanation: Parametric estimating uses historical rates or algorithms (e.g., cost or hours per unit) applied to known quantities to calculate an overall estimate.
