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

Which aspect of Analogous Estimating could improve project planning?

1. Developing advanced financial models

2. Utilizing previous project data to forecast outcomes

3. Establishing new project benchmarks

4. Creating unique project methodologies

The correct answer is: Utilizing previous project data to forecast outcomes

Utilizing previous project data to forecast outcomes is a key component of Analogous Estimating, as it leverages historical data from similar projects to make informed predictions about the current project's costs, duration, and other parameters. This practice allows project managers to benefit from lessons learned, encapsulating the experiences of past projects to enable more accurate and reliable estimates. By referencing previously completed projects that shared characteristics or encountered similar challenges, teams can identify trends and patterns that will aid in planning. This results in improved accuracy of the estimates and can lead to better resource allocation, risk management, and overall project success. It fosters an environment of continuous improvement, as teams learn from what has worked in the past and what hasn’t, thereby enhancing the planning process. In contrast, options such as developing advanced financial models or creating unique project methodologies are approaches that might not leverage past data directly. While they can contribute to project management, their connection to Analogous Estimating is less direct. Establishing new project benchmarks can be useful but does not inherently provide the historical context that is critical for making accurate assessments in Analogous Estimating.