Question

Serge and the architect estimate that the renovation of the restaurant space will cost $380/sq ft. What is this an example of?

a. Work activity aggregate estimating

b. Parametric estimating

c. Ratio estimating

d. Apportion estimating
The ratio method uses experience from prior projects to estimate the overall cost of the current project. Estimating cost per square foot is an example of this.

Answer 1

Estimating the renovation cost at $380/sq ft is an example of parametric estimating, which uses unit cost metrics to predict project costs based on historical data.

Step-by-step explanation:

The cost estimation of $380/sq ft for the restaurant renovation is an example of parametric estimating. This method involves using statistical data from past projects to predict costs for current ones. In parametric estimating, the variables are taken into account in a unit cost, such as cost per square foot, and then multiplied by the quantity needed for the project. It is highly accurate when historical data is reliable and variables are clearly defined.

For instance, considering a budget constraint scenario, a family must balance the tradeoffs between housing space and the number of meals they can afford. Similarly, in the case of 'The Clip Joint' barber shop, the total costs are calculated by summing up the fixed costs and variable costs, such as wages for hiring additional barbers. Both examples showcase the importance of cost estimations in planning and budgeting.