In reality, there are other factors to put in mind. The calculation of the construction using parametric deterministic using the rule of three will be as follows.Įstimated construction cost (ECC) = $200×3000 square foot = $6000. The current building is intended to occupy a space of 3000 sq ft – parameter value for the new project. For exact types of buildings, the cost had amounted to $200 for every square ft in the past- the cost for every parameter unit. The assessment will then be done using the rule of 3.

The team will go ahead and use the in-house database to track the costs and durations that the previous projects took.įor an initial evaluation, the company will take a parametric assessment using the building cost for every square ft as the appropriate input parameter. This company has done similar projects in the last few years. A project team in a certain construction company has been tasked to get a cost estimate of a new modern office building.

This example concerns evaluating construction costs through a parametric estimate. It is an established practice in most of the project frameworks including PMI (Project Management Institute) where it’s registered under the techniques and tools of the estimate activity duration and estimate cost’ processes. Parametric estimating can also be referred to as a statistic-based method to evaluate the expected time and number of resources that are needed to perform and finish a project, activity, or part of a project. One of the most profitable aspects of parametric assessing is the high level of accuracy that can be generated depending on how sophisticated the primary information was. This data is then executed to calculate and demonstrate parameter estimation. Some good examples of other variables are square footages in the contraction project, number of code/ lines existing in a software app among other variables. It can be referred to as an estimation technique that uses the statistical relationship existing between series of historical information and specific other variables. It is essential for it gives out valuable guidance in the implementation of the project. Parametric estimation is a fundamental strategy mostly used by project managers in project management.

Cocomo model cost estimation example