As a thumb rule, the major difference between Analogous and Parametric Estimation is mathematical operations. Like, in parametric we do more calculation while analogous is just an expert opinion like.
PMP, CAPM and other project management related certifications are always having some portion reserve for estimation techniques. Cost estimation and duration estimation are the most significant areas.
There are a number of techniques for estimations for a project like
Three Point Estimation
Group Decision / Data Analysis
But, here in this blog, we will look at Analogous and Parametric Estimation as these two are most confusing at the exam.
Difference between Analogous and Parametric Estimation
Both techniques are mainly used for cost and duration of any project through historical/previous data.
No calculations only we use historical data of the same project. It is just like an expert judgement. This only works if you analyze the same kind of projects but if you don’t have previous data then this technique is not applicable.
Advantages of Analogous Estimation
Most simple technique without any hectic calculations
Works best if only a few details are available
Quick and fast output
Lest costly and not time-consuming
The disadvantage of Analogous Estimation
Accuracy is a question unless you have a history of the same project.
Analogous estimation is done at initial stages of projects where management have to decide either to go for this project or not – or management is looking for a quick suggestion from a Project Manager.
Example of Analogous Estimation
We want to calculate how much concrete is required to build a house. For this, you need to have high-level historical data of similar house.
Parametric Estimation is where we use estimation at parameters level. It involves mathematical calculations and hence is considered more accurate than Analogous Estimation. Here, we do unit wise calculations of cost, duration, man-hours etc.
Advantages of Parametric Estimation
High accuracy than Analogous
Disadvantages of Parametric Estimation
Time taking as you need to calculate unit wise
Example of Parametric Estimation
We want to calculate how much concrete is required to build a house. For this, we need to know how much total unit meter the area is? Previous productivity rates to estimate the duration and to calculate human resources and the cost.
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