Analogous cost estimating is an estimating technique that uses the values of parameters, such as scope, cost, budget, and duration or measures of scale such as size, weight, and complexity, from a previous, similar activity, as the basis for estimating the same parameter or measure for a future activity. When estimating costs, this technique relies on the actual cost of previous, similar projects as the basis for estimating the cost of the current project. It is a gross value estimating approach, sometimes adjusted for known differences in project complexity. Analogous cost estimating is frequently used to estimate a parameter when there is a limited amount of detailed information about the project (e.g., in the early phases of a project). Analogous cost estimating relies on expert judgment.
Analogous cost estimating is generally less costly than other techniques, but it is also generally less accurate. It is most reliable when previous activities are similar in fact, and not just in appearance, and the persons or groups preparing the estimates have the needed expertise. Analogous cost estimates can be applied to a total project or to segments of a project, used in conjunction with other estimating methods.
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What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.