Analog Estimation Vs Parametric Estimation | Estimate Vs Budget | Contingency Reserve Vs Management Reserve

Analogous Estimation vs. Parametric Estimation

Analogous Estimation

Analogous estimations are made based on the time or cost taken by similar older projects. Thus, these estimations are based on the experience of the team or the history of the project. The one disadvantage of this method is that the estimation may not always be accurate. 

For example, the developmental cost of an online booking application took about 1 month. You plan on developing a similar application. It can thus be assumed that the analogous estimation is 1 month. 

Parametric estimation is done on a per unit basis and uses the relation between variables to arrive at the cost or the duration. Compared to the analogous estimation, parametric estimation stands to be more accurate. But the measurement must be scalable in order to achieve the accuracy.

For example, if it takes 1 day to produce 10 pieces of content, how mangy days will it take to produce 100 pieces of content? 
 

Estimate Vs Budget

We have differentiated between the two kinds of estimation. Now let us shift to estimate and budget. 

Estimate 

Estimation is the likelihood of the duration or the cost in terms of quantitative numbers to complete the project. But can we achieve the project with estimation? The answer is not really. So this ambiguity leads to adding a buffer called the estimate.

Estimate is an approximate figure to arrive at the duration, cost, effort, and resources to complete the project.

Budget 

Budget is approved estimate after the addition of reserve.

Contingency reserve vs Management reserve