Question

A project manager is developing the initial budget for a new product-development project during the early planning stage. Very little detailed design information is available, and the sponsor needs a rough order-of-magnitude cost figure quickly to decide whether to authorize the project. The PM has data from three similar past projects the organization completed. Which estimating approach should the PM use to produce this initial cost figure?

Accepted Answer

Analogous estimating, using the actual costs of the similar past projects as the basis

Answer

Bottom-up estimating, aggregating detailed cost estimates for each work package

Answer

Three-point estimating, applying PERT calculations to each activity

Answer

Parametric estimating, building a regression model from all historical organizational data