What cost estimating technique would be indicated for a program that just entered the Technology Maturation and Risk Reduction phase and has technical and cost data from similar systems?

The chosen answer reflects the most appropriate cost estimating technique for a program in the Technology Maturation and Risk Reduction phase that has access to technical and cost data from similar systems. Analogy estimating involves using historical data from previously completed or similar programs to draw parallels and inform cost predictions for the current initiative. This technique is particularly useful when dealing with uncertainty or when the program is in its early stages, allowing estimators to leverage existing data to develop realistic and informed cost estimates.

The benefit of analogy estimating lies in its capacity to adjust for variations in specific factors, such as scale, complexity, and technology maturity, while using established performance and cost benchmarks from analogous projects. This increases confidence in the estimates as they are grounded in real-world outcomes rather than purely theoretical calculations.

In contrast, parametric estimating relies more on statistical relationships or algorithms derived from historical data across multiple projects and may not directly make use of the exact technical data from similar systems. Engineering build-up requires detailed knowledge of requirements, tasks, and resource allocations, which may not be fully fleshed out in the early phases. Life cycle cost analysis encompasses a comprehensive assessment over the entire lifespan of a system but may not be suitable for early-stage estimation when specific project details are still evolving and uncertain. Thus,