Types of Estimating Techniques

In project management, we will be doing estimates for time and cost. There are few techniques that can be used to perform estimating.

Estimate is a quantitative assessment of the likely amount or outcome. It should always include some indication of accuracy (e.g., plus/minus x percent).

Analogous
This is an estimate done using the values of parameters from previous experiences with similar activities.

Parametric
This estimating technique uses statistical relationship between historical data and other variables to calculate an estimate for activity parameters. For example, multiplying the planned work to be performed by the historical cost per unit to obtain an estimated value.

Three-point Estimates
This estimate is known as the PERT (Program Evaluation Review Technique) estimate. This technique uses weighted average of optimistic, pessimistic and most likely estimates.

Reserve Analysis
An analytical technique to determine the essential features and relationships of components in project management plan to establish a reserve for the schedule duration, budget, estimated cost or funds for a project.

Bottom-up
Estimating is done on individual work package of the WBS and rolled-up to get the total estimate for the project. This estimate can be the most accurate because it is done by the subject matter expert themselves. However PM needs to be aware of padding.

Or, we could do it the Dilbert-way :-) :