TOPIC: Free CAPM® Exam Sample Question

The difference between analogous and parametric estimating is:

A. Analogous estimating uses historical information while parametric estimating is based on expert judgment.
B. Analogous estimating uses historical information while parametric estimating is based on three-point estimating.
C. Analogous estimating uses three estimates to define an activity's cost while parametric estimating uses historical information.
D. Analogous estimating is generally less accurate than parametric estimating.

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HINT: Parametric estimating is analogous estimating with considering other variables that reflect the difference between the project and previous ones.

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Answer and Explanation:
The correct answer is D.

Analogous and parametric are two popular cost estimation methods that are mainly based on historical data from previous projects. While analogous estimating uses the values such as cost, budget, and scope from previous projects as a basis for estimating the same parameters of a current project, parametric estimating often combines such information with other variables or other project parameters to calculate the values. Thus, parametric estimating provides a more accurate result, compared with the analogous method.

Details for each option:

A. Analogous estimating uses historical information while parametric estimating is based on expert judgment.
Incorrect. Both analogous and parametric estimating are based on historical information and expert judgment.

B. Analogous estimating uses historical information while parametric estimating is based on three-point estimating.
Incorrect. While it is true that analogous estimating uses historical information, parametric estimating is distinct and not based on three-point estimating. Three-point estimating uses the average or weighted average of the optimistic, pessimistic, and most likely estimate, while parametric estimating is based on historical data and project parameters.


C. Analogous estimating uses three estimates to define an activity's cost while parametric estimating uses historical information.
Incorrect. Although parametric estimating is based on historical information, analogous estimating does not use three-point estimating results.

D. Analogous estimating is generally less accurate than parametric estimating.
Correct. While analogous estimating uses the historical data of previous projects, parametric estimating analyzes the statistical relationship between historical data and other variables to provide results that are more accurate.

Reference: A Guide to the Project Management Body of Knowledge, (PMBOK^® Guide) – Sixth Edition, Project Management Institute Inc., 2017, Page(s) 200-201

The correct answer is not B ....it is D.