Final answer:
Quantitative analysis methods estimate cost functions using a formal mathematical method to fit cost functions to past data observations, involving the creation of mathematical models that consider various cost components and insights gained from different cost measures.
Step-by-step explanation:
Quantitative analysis methods estimate cost functions using a formal mathematical method to fit cost functions to past data observations. This process involves creating mathematical models to examine costs for various systems, technologies, and approaches. Models can predict costs and help analyze the science behind a technique and its implementation costs which include materials, fabrication, operation, and maintenance. In business, breaking down total costs into fixed cost, marginal cost, average total cost, and average variable cost is crucial as each provides different insights.
Familiarity with formulas, dimensions, and units helps in developing estimates for costs even when input quantities are not known with precision. When creating new models for emerging technologies, different mathematical equations need to be formulated. In the context of the water industry, mathematics could be used to develop a model for the cost and availability of current water sources like wells and trucked-in water.