When an activity cannot be estimated with a reasonable degree of confidence, the work within the activity is decomposed into more detail using which type of estimating?

6.4.2.1 EXPERT JUDGMENT
Described in Section 4.1.2.1. Expertise should be considered from individuals or groups with specialized knowledge or training in the following topics:
uuSchedule development, management, and control; uuExpertise in estimating; and
uuDiscipline or application knowledge.
6.4.2.2 ANALOGOUS ESTIMATING
Analogous estimating is a technique for estimating the duration or cost of an activity or a project using historical data from a similar activity or project. Analogous estimating uses parameters from a previous, similar project, such as duration, budget, size, weight, and complexity, as the basis for estimating the same parameter or measure for a future project. When estimating durations, this technique relies on the actual duration of previous, similar projects as the basis for estimating the duration of the current project. It is a gross value estimating approach, sometimes adjusted for known differences in project complexity. Analogous duration estimating is frequently used to estimate project duration when there is a limited amount of detailed information about the project.
Analogous estimating is generally less costly and less time-consuming than other techniques, but it is also less accurate. Analogous duration estimates can be applied to a total project or to segments of a project and may be used in conjunction with other estimating methods. Analogous estimating is most reliable when the previous activities are similar in fact and not just in appearance, and the project team members preparing the estimates have the needed expertise.
6.4.2.3 PARAMETRIC ESTIMATING
Parametric estimating is an estimating technique in which an algorithm is used to calculate cost or duration based on historical data and project parameters. Parametric estimating uses a statistical relationship between historical data and other variables (e.g., square footage in construction) to calculate an estimate for activity parameters, such as cost, budget, and duration.
200
Part 1 – Guide
Durations can be quantitatively determined by multiplying the quantity of work to be performed by the number of labor hours per unit of work. For example, duration on a design project is estimated by the number of drawings multiplied by the number of labor hours per drawing, or on a cable installation, the meters of cable multiplied by the number of labor hours per meter. If the assigned resource is capable of installing 25 meters of cable per hour, the duration required to install 1,000 meters is 40 hours (1,000 meters divided by 25 meters per hour).
This technique can produce higher levels of accuracy depending on the sophistication and underlying data built into the model. Parametric schedule estimates can be applied to a total project or to segments of a project, in conjunction with other estimating methods.
6.4.2.4 THREE-POINT ESTIMATING
The accuracy of single-point duration estimates may be improved by considering estimation uncertainty and risk. Using three-point estimates helps define an approximate range for an activity’s duration:
uuMost likely (tM). This estimate is based on the duration of the activity, given the resources likely to be assigned, their productivity, realistic expectations of availability for the activity, dependencies on other participants, and interruptions.
uuOptimistic (tO). The activity duration based on analysis of the best-case scenario for the activity.
uuPessimistic (tP). The duration based on analysis of the worst-case scenario for the activity.
Depending on the assumed distribution of values within the range of the three estimates, the expected duration, tE,
can be calculated. One commonly used formula is triangular distribution:
tE = (tO + tM + tP) / 3.
Triangular distribution is used when there is insufficient historical data or when using judgmental data. Duration estimates based on three points with an assumed distribution provide an expected duration and clarify the range of uncertainty around the expected duration.
6.4.2.5 BOTTOM-UP ESTIMATING
Bottom-up estimating is a method of estimating project duration or cost by aggregating the estimates of the lower- level components of the WBS. When an activity’s duration cannot be estimated with a reasonable degree of confidence, the work within the activity is decomposed into more detail. The detail durations are estimated. These estimates are then aggregated into a total quantity for each of the activity’s durations. Activities may or may not have dependencies between them that can affect the application and use of resources. If there are dependencies, this pattern of resource usage is reflected and documented in the estimated requirements of the activity.
6.4.2.6 DATA ANALYSIS
Data analysis techniques that can be used for this process include but are not limited to:
uuAlternatives analysis. Alternatives analysis is used to compare various levels of resource capability or skills; scheduling compression techniques (described in Section 6.5.2.6); different tools (manual versus automated); and make, rent, or buy decisions regarding the resources. This allows the team to weigh resource, cost, and duration variables to determine an optimal approach for accomplishing project work.
uuReserve analysis. Reserve analysis is used to determine the amount of contingency and management reserve needed for the project. Duration estimates may include contingency reserves, sometimes referred to as schedule reserves, to account for schedule uncertainty. Contingency reserves are the estimated duration within the schedule baseline, which is allocated for identified risks that are accepted. Contingency reserves are associated with the known-unknowns, which may be estimated to account for this unknown amount of rework. The contingency reserve may be a percentage of the estimated activity duration or a fixed number of work periods. Contingency reserves may be separated from the individual activities and aggregated. As more precise information about the project becomes available, the contingency reserve may be used, reduced, or eliminated. Contingency should be clearly identified in the schedule documentation.
Estimates may also be produced for the amount of management reserve of schedule for the project. Management reserves are a specified amount of the project budget withheld for management control purposes and are reserved for unforeseen work that is within scope of the project. Management reserves are intended to address the unknown-unknowns that can affect a project. Management reserve is not included in the schedule baseline, but it is part of the overall project duration requirements. Depending on contract terms, use of management reserves may require a change to the schedule baseline.
6.4.2.7 DECISION MAKING
Described in Section 5.2.2.4. Decision-making techniques that can be used in this process include but are not limited to voting. One variation of the voting method that is often used in agile-based projects is called the fist of five (also called fist to five). In this technique, the project manager asks the team to show their level of support for a decision by holding up a closed fist (indicating no support) up to five fingers (indicating full support). If a team member holds up fewer than three fingers, the team member is given the opportunity to discuss any objections with the team. The project manager continues the fist-of-five process until the team achieves consensus (everyone holds up three or more fingers) or agrees to move on to the next decision.
6.4.2.8 MEETINGS
The project team may hold meetings to estimate activity durations. When using an agile approach, it is necessary to conduct sprint or iteration planning meetings to discuss prioritized product backlog items (user stories) and decide which of these items the team will commit to work on in the upcoming iteration. The team breaks down user stories to low-level tasks, with estimates in hours, and then validates that the estimates are achievable based on team capacity over the duration (iteration). This meeting is usually held on the first day of the iteration and is attended by the product owner, the Scrum team, and the project manager. The outcome of the meeting includes an iteration backlog, as well as assumptions, concerns, risks, dependencies, decisions, and actions.

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05/19/2019 at 8:12 PM

6.4.2.1 EXPERT JUDGMENT
Described in Section 4.1.2.1. Expertise should be considered from individuals or groups with specialized knowledge or training in the following topics:
uuSchedule development, management, and control; uuExpertise in estimating; and
uuDiscipline or application knowledge.
6.4.2.2 ANALOGOUS ESTIMATING
Analogous estimating is a technique for estimating the duration or cost of an activity or a project using historical data from a similar activity or project. Analogous estimating uses parameters from a previous, similar project, such as duration, budget, size, weight, and complexity, as the basis for estimating the same parameter or measure for a future project. When estimating durations, this technique relies on the actual duration of previous, similar projects as the basis for estimating the duration of the current project. It is a gross value estimating approach, sometimes adjusted for known differences in project complexity. Analogous duration estimating is frequently used to estimate project duration when there is a limited amount of detailed information about the project.
Analogous estimating is generally less costly and less time-consuming than other techniques, but it is also less accurate. Analogous duration estimates can be applied to a total project or to segments of a project and may be used in conjunction with other estimating methods. Analogous estimating is most reliable when the previous activities are similar in fact and not just in appearance, and the project team members preparing the estimates have the needed expertise.
6.4.2.3 PARAMETRIC ESTIMATING
Parametric estimating is an estimating technique in which an algorithm is used to calculate cost or duration based on historical data and project parameters. Parametric estimating uses a statistical relationship between historical data and other variables (e.g., square footage in construction) to calculate an estimate for activity parameters, such as cost, budget, and duration.
200
Part 1 – Guide
Durations can be quantitatively determined by multiplying the quantity of work to be performed by the number of labor hours per unit of work. For example, duration on a design project is estimated by the number of drawings multiplied by the number of labor hours per drawing, or on a cable installation, the meters of cable multiplied by the number of labor hours per meter. If the assigned resource is capable of installing 25 meters of cable per hour, the duration required to install 1,000 meters is 40 hours (1,000 meters divided by 25 meters per hour).
This technique can produce higher levels of accuracy depending on the sophistication and underlying data built into the model. Parametric schedule estimates can be applied to a total project or to segments of a project, in conjunction with other estimating methods.
6.4.2.4 THREE-POINT ESTIMATING
The accuracy of single-point duration estimates may be improved by considering estimation uncertainty and risk. Using three-point estimates helps define an approximate range for an activity’s duration:
uuMost likely (tM). This estimate is based on the duration of the activity, given the resources likely to be assigned, their productivity, realistic expectations of availability for the activity, dependencies on other participants, and interruptions.
uuOptimistic (tO). The activity duration based on analysis of the best-case scenario for the activity.
uuPessimistic (tP). The duration based on analysis of the worst-case scenario for the activity.
Depending on the assumed distribution of values within the range of the three estimates, the expected duration, tE,
can be calculated. One commonly used formula is triangular distribution:
tE = (tO + tM + tP) / 3.
Triangular distribution is used when there is insufficient historical data or when using judgmental data. Duration estimates based on three points with an assumed distribution provide an expected duration and clarify the range of uncertainty around the expected duration.
6.4.2.5 BOTTOM-UP ESTIMATING
Bottom-up estimating is a method of estimating project duration or cost by aggregating the estimates of the lower- level components of the WBS. When an activity’s duration cannot be estimated with a reasonable degree of confidence, the work within the activity is decomposed into more detail. The detail durations are estimated. These estimates are then aggregated into a total quantity for each of the activity’s durations. Activities may or may not have dependencies between them that can affect the application and use of resources. If there are dependencies, this pattern of resource usage is reflected and documented in the estimated requirements of the activity.
6.4.2.6 DATA ANALYSIS
Data analysis techniques that can be used for this process include but are not limited to:
uuAlternatives analysis. Alternatives analysis is used to compare various levels of resource capability or skills; scheduling compression techniques (described in Section 6.5.2.6); different tools (manual versus automated); and make, rent, or buy decisions regarding the resources. This allows the team to weigh resource, cost, and duration variables to determine an optimal approach for accomplishing project work.
uuReserve analysis. Reserve analysis is used to determine the amount of contingency and management reserve needed for the project. Duration estimates may include contingency reserves, sometimes referred to as schedule reserves, to account for schedule uncertainty. Contingency reserves are the estimated duration within the schedule baseline, which is allocated for identified risks that are accepted. Contingency reserves are associated with the known-unknowns, which may be estimated to account for this unknown amount of rework. The contingency reserve may be a percentage of the estimated activity duration or a fixed number of work periods. Contingency reserves may be separated from the individual activities and aggregated. As more precise information about the project becomes available, the contingency reserve may be used, reduced, or eliminated. Contingency should be clearly identified in the schedule documentation.
Estimates may also be produced for the amount of management reserve of schedule for the project. Management reserves are a specified amount of the project budget withheld for management control purposes and are reserved for unforeseen work that is within scope of the project. Management reserves are intended to address the unknown-unknowns that can affect a project. Management reserve is not included in the schedule baseline, but it is part of the overall project duration requirements. Depending on contract terms, use of management reserves may require a change to the schedule baseline.
6.4.2.7 DECISION MAKING
Described in Section 5.2.2.4. Decision-making techniques that can be used in this process include but are not limited to voting. One variation of the voting method that is often used in agile-based projects is called the fist of five (also called fist to five). In this technique, the project manager asks the team to show their level of support for a decision by holding up a closed fist (indicating no support) up to five fingers (indicating full support). If a team member holds up fewer than three fingers, the team member is given the opportunity to discuss any objections with the team. The project manager continues the fist-of-five process until the team achieves consensus (everyone holds up three or more fingers) or agrees to move on to the next decision.
6.4.2.8 MEETINGS
The project team may hold meetings to estimate activity durations. When using an agile approach, it is necessary to conduct sprint or iteration planning meetings to discuss prioritized product backlog items (user stories) and decide which of these items the team will commit to work on in the upcoming iteration. The team breaks down user stories to low-level tasks, with estimates in hours, and then validates that the estimates are achievable based on team capacity over the duration (iteration). This meeting is usually held on the first day of the iteration and is attended by the product owner, the Scrum team, and the project manager. The outcome of the meeting includes an iteration backlog, as well as assumptions, concerns, risks, dependencies, decisions, and actions.

When an activity cannot be estimated with a reasonable degree of confidence, the work within the activity is decomposed into more detail using which type of estimating?

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