Parametric estimating uses a statistical relationship between historical data and other variables (e.g., square footage in construction) to calculate an estimate for activity parameters, such as cost, budget, and duration.
Activity durations can be quantitatively determined by multiplying the quantity of work to be performed by labor hours per unit of work. For example, activity duration can be estimated on a design project by the number of drawings multiplied by the number of labor hours per drawing, or a cable installation in meters of cable multiplied by the number of labor hours per meter. For example, if the assigned resource is capable of installing 25 meters of cable per hour, the duration required to install 1,000 meters would be 40 hours. (1,000 meters divided by 25 meters per hour).
This technique can produce higher levels of accuracy depending upon the sophistication and underlying data built into the model. Parametric time estimates can be applied to a total project or to segments of a project, in conjunction with other estimating methods.
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