Which cost estimating technique is indicated when the program is in the early Engineering and Manufacturing Development phase, a quick what if estimate is needed, some subjectivity is allowed, and a good database exists of similar systems?

Which cost estimating technique is indicated when the program is in the early Engineering and Manufacturing Development phase, a quick what if estimate is needed, some subjectivity is allowed, and a good database exists of similar systems?

• A. Bottom-Up
• B. Parametric
• C. Analogous
• D. Expert Judgment

Answer: (B)

For an early-stage program, you want a fast, data-driven method that lets you run what-if scenarios using data from similar systems. Parametric estimation fits this need because it uses cost estimating relationships derived from historical data and the key cost drivers of the system. With a good database of comparable systems, you can calibrate the model and adjust drivers to see how costs change, giving a quick, repeatable estimate even when the design isn’t fully defined. Some subjectivity is involved in choosing which drivers to include and how to calibrate them, but the approach remains grounded in data, enabling rapid exploration of alternatives. Bottom-up requires detailed component data and is too slow at this stage; analogous can give rough estimates but doesn’t support the same rapid what-if analysis with driver-based changes; expert judgment is more qualitative and less suited to scalable, parameterized cost modeling.

For an early-stage program, you want a fast, data-driven method that lets you run what-if scenarios using data from similar systems. Parametric estimation fits this need because it uses cost estimating relationships derived from historical data and the key cost drivers of the system. With a good database of comparable systems, you can calibrate the model and adjust drivers to see how costs change, giving a quick, repeatable estimate even when the design isn’t fully defined. Some subjectivity is involved in choosing which drivers to include and how to calibrate them, but the approach remains grounded in data, enabling rapid exploration of alternatives. Bottom-up requires detailed component data and is too slow at this stage; analogous can give rough estimates but doesn’t support the same rapid what-if analysis with driver-based changes; expert judgment is more qualitative and less suited to scalable, parameterized cost modeling.