According to the PMBOK® Guide, specifically the Estimate Costs and Estimate Activity Durations processes, project managers choose from several estimation techniques depending on the available data and the required level of precision.
Analogous Estimating (Choice C): This technique uses values or attributes—such as scope, cost, budget, or duration—from a previous, similar project as the basis for estimating the same attribute for the current project. It is often used when there is a limited amount of detailed information available about the current project (e.g., in the early phases). It is generally less costly and time-consuming than other techniques but also less accurate. Because the team member is specifically " checking documentation from previous similar projects, " they are performing an analogy.
Bottom-up Estimating (Choice A): This involves estimating the cost of individual work packages or activities with the greatest level of specified detail. These costs are then summarized or " rolled up " to higher levels. This requires a detailed WBS and is much more granular than looking at past projects.
Three-point Estimating (Choice B): This technique improves accuracy by considering estimation uncertainty and risk. It uses three estimates (Most Likely, Optimistic, and Pessimistic) to calculate an expected cost. It does not inherently rely on " previous similar projects " as its primary source, though historical data can inform the three points.
Parametric Estimating (Choice D): This uses a statistical relationship between historical data and other variables (e.g., square footage in construction, lines of code in software development) to calculate an estimate. While it uses historical data, it applies a mathematical algorithm or model rather than a direct comparison to one specific previous project.
By using Analogous Estimating, the project manager can quickly develop a high-level estimate based on the organization ' s Organizational Process Assets (OPAs) and historical knowledge, provided the previous projects are truly similar in nature to the current one.
