Analogous estimating is an estimation technique that uses the historical data of old projects to estimate the cost for similar new projects. Analogous estimation is also called top-down estimating and is used by project managers when there is limited information regarding the current project.
Analogous estimation technique is an easy-to-implement technique that possesses a success rate of 60% compared to the initial estimates. In addition to the historical data, the team’s experience and expertise in judgment influence the accuracy of projects.
This article discusses the requirements and advantages of analogous estimation techniques used in the construction industry.
Requirements of Analogous Estimation Technique
Certain parameters from the historical data are used to estimate similar parameters for the future activities of the project. Some examples of parameters used are the project's scope, cost, and duration. Other scale parameters include the size, weight, and complexity of the project.
The basic requirements for analogous estimation are:
- Data from previous and ongoing construction projects
- Projects should be similar to the current project
- For an entirely new project, similar modules, activities, and data similar to the current project are collected.
- Participation of the project manager and estimation team to ensure experienced judgment on the estimates.
When to Use Analogous Estimates?
Analogous estimates are used in the following situations:
- Analogous estimates are one of the best options to put an initial value on the project and its parts. It is used to create a bid for that project, and as the project progresses, the estimates can be refined.
- Used when there is no similar data available to get an exact comparison with the current project.
- Used when the project requires a rough estimate.
- To obtain an expert judgment by comparing the experience and knowledge gathered from the team and data from the past projects.
Advantages of Analogous Estimation
- The technique is simple and is less time taking.
- It saves money because it requires little documentation and less processing.
- Useful when the current project data is limited.
- The effort and duration required for individual construction activities can be easily understood by studying the past data.
Analogous estimation is not an accurate project estimation technique, and it is found more appropriate for the initial planning stages of a project rather than the execution stages.
FAQs
Analogous estimating is an estimation technique that uses the historical data of old projects to estimate the cost for similar new projects.
The basic requirements for analogous estimation are:
1. Data from previous and ongoing construction projects
2. Projects should be similar to the current project
3. For an entirely new project, similar modules, activities, and data similar to the current project are collected.
4. Participation of the project manager and estimation team to ensure experienced judgment on the estimates.
Analogous estimation is not an accurate project estimation technique, and it is found more appropriate for the initial planning stages of a project rather than the execution stages.
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