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6 - PROJECT TIME MANAGEMENT

Analogous estimating is generally less costly and less time consuming than other techniques, but it is also
less accurate. Analogous duration estimates can be applied to a total project or to segments of a project and may
be used in conjunction with other estimating methods. Analogous estimating is most reliable when the previous
activities are similar in fact and not just in appearance, and the project team members preparing the estimates
have the needed expertise.

6.5.2.3 Parametric Estimating

Parametric estimating is an estimating technique in which an algorithm is used to calculate cost or duration
based on historical data and project parameters. Parametric estimating uses a statistical relationship between
historical data and other variables (e.g., square footage in construction) to calculate an estimate for activity
parameters, such as cost, budget, and duration.
Activity durations can be quantitatively determined by multiplying the quantity of work to be performed by labor
hours per unit of work. For example, activity duration on a design project is estimated by the number of drawings
multiplied by the number of labor hours per drawing, or on a cable installation, the meters of cable multiplied by the
number of labor hours per meter. For example, if the assigned resource is capable of installing 25 meters of cable
per hour, the duration required to install 1,000 meters is 40 hours. (1,000 meters divided by 25 meters per hour).

This technique can produce higher levels of accuracy depending upon the sophistication and underlying data
built into the model. Parametric time estimates can be applied to a total project or to segments of a project, in
conjunction with other estimating methods.

6.5.2.4 three-Point Estimating

The accuracy of single-point activity duration estimates may be improved by considering estimation uncertainty
and risk. This concept originated with the program evaluation and review technique (PERT). PERT uses three
estimates to define an approximate range for an activity’s duration:
• Most likely (tM). This estimate is based on the duration of the activity, given the resources likely to be
assigned, their productivity, realistic expectations of availability for the activity, dependencies on other
participants, and interruptions.

• optimistic (tO). The activity duration based on analysis of the best-case scenario for the activity.
• Pessimistic (tP). The activity duration based on analysis of the worst-case scenario for the activity.

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