Project Management Institute (PMI) Professional in Business Analysis Practice Exam

What technique focuses on using historical data to estimate project duration or cost?

1. Expert judgment

2. Parametric estimating

3. Analogous estimating

4. Three-point estimating

The correct answer is: Analogous estimating

The technique that emphasizes the use of historical data to estimate project duration or cost is known as analogous estimating. This method relies on past project data to draw similarities and infer potential outcomes for the current project. By evaluating similar projects and their respective outcomes, project managers can create more accurate estimates based on actual performance. Analogous estimating is particularly useful in scenarios where there is limited information available for the current project but a wealth of historical data from similar initiatives. This can help in quickly generating estimates, especially during the early phases of project planning, where other forms of estimating may not yet be feasible or practical. While other techniques exist within the realm of estimating, their focuses differ. For example, parametric estimating involves mathematical algorithms and statistical relationships rather than directly relying on past project experiences. Expert judgment relies on the insights and experiences of individuals, which might not always be backed by historical data. Three-point estimating utilizes a range of estimates to provide a more nuanced view but does not specifically center on historical data as its primary basis for making projections.