estimating | Project Success

The PMP exam will test your understanding of estimation techniques. Here are the four estimating techniques you need to know, and when to use each one.

Analogous Estimating

Look at similar features or similar products from past projects to estimate the current item. It is like using an analogy. This method is most helpful at the beginning of your project when you do not have detailed information but you do have someone on the team who has worked on something similar before. It is fast but less accurate than other methods.

Parametric Estimating

Use a parameter like $30 per meter or 10 days to deliver to another country. This method works well when you have some information about what you are estimating and a bit more time to develop the estimate. It is more accurate than analogous estimating.

Bottom-Up Estimating

This is the most accurate but also the most time-consuming. Take all the work packages at the lowest levels of your work breakdown structure and estimate each one. Then aggregate all those estimates together to get the overall project cost or budget. Use this method when you have time and need the highest accuracy.

Three-Point Estimating

Take an average of three estimates: optimistic, most likely and pessimistic. Add them together and divide by three. This gives you a balanced estimate that accounts for uncertainty.

A similar method is PERT or beta estimating which uses the formula: (Optimistic + 4 × Most Likely + Pessimistic) ÷ 6. It weights the most likely estimate more heavily.

Know when to use each method and you will handle estimation questions confidently on your PMP exam. You can do it!

– David McLachlan

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