PMP lesson · Cost & EVM · Cost: estimating, budget and earned value · lesson 1 of 5 · about 8 minutes

Estimating techniques: analogous, parametric, three-point and bottom-up

Predictive · agile teams use relative estimation (story points)Free preview

Goal: After this lesson you can choose the right estimating technique for a situation and calculate a three-point (PERT) estimate.

1The situation

“How long will it take?”

Day one of a new robot cell. The customer asks: “How much and how long?” You have no design yet, only a similar project from last year.

A month later, the design is done, and you know there are 40 I/O points, 6 robot programs and 12 guard panels. Now you can estimate much more precisely.

Different moments need different estimating techniques. The exam asks you to choose the right one from the situation.

2Four techniques

Each technique fits a different amount of information:

Technique	How	Use when	Accuracy
Analogous (top-down)	Copy a similar past project, adjusted	Early; little detail; quick answer needed	Lowest
Parametric	Unit rate × quantity (statistical relationship)	Reliable historical rates exist; work is scalable	Good
Three-point	Optimistic, most likely, pessimistic	Uncertainty is significant	Shows the range
Bottom-up	Estimate each work package, then add	Detailed WBS available	Highest

Exam shortcut: “little information, early, quick” → analogous · “historical rate per unit” → parametric · “uncertain” → three-point · “detailed WBS, most accurate” → bottom-up.

3The four techniques side by side

Analogous

Top-down. Use a similar past project.
“The last cell took 10 weeks.”
✔ fast, early · ✘ least accurate

Parametric

Unit rate × quantity.
“40 I/O points × 2 h = 80 h.”
✔ accurate if the rate is reliable

Three-point

O, M, P. Includes uncertainty.
“8 / 12 / 22 days.”
✔ shows the range

Bottom-up

Estimate each work package, add up.
✔ most accurate · ✘ slowest, needs a WBS

From quick and rough (left) to slow and precise (right).

4How it looks on the exam

Exam-style question 1. Early in initiation, the sponsor needs a rough cost figure for a new conveyor line within two days to decide whether to proceed with detailed planning. The organisation completed a similar line two years ago. Which estimating technique is MOST appropriate?

A. Bottom-up estimating

B. Analogous estimating

C. Parametric estimating using detailed unit rates

D. Three-point estimating for every activity

Show the answer and the decode

Answer: B.

In simple English

Very early, little detail, and a similar past project exists.

What is the question really asking?

The right technique.

Key words / trigger

“rough cost figure within two days … similar line”

PMP logic

Quick, top-down estimate based on a similar project = analogous.

Why the wrong answer looks attractive

Bottom-up is the most accurate, but it needs a detailed WBS that does not exist yet.

5Remember this

Your memory card

Analogous = similar past project, quick, least accurate
Parametric = rate × quantity · Bottom-up = add work packages, most accurate
PERT = (O + 4M + P) ÷ 6 · SD = (P − O) ÷ 6
The people who do the work estimate it; accuracy improves as detail grows

The full lesson in the PMCLEAR app also has:

the rest of the lesson (Three-point estimates, Good estimating habits)
a worked example
the common traps (wrong vs right)
2 exam-style questions with the decode
a 3-question quick check
an interactive calculator

Open the full lesson → Create a free account

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