The Project Manager is creating an estimate for building a house. It is a house similar to what he builds often. He is using a figure of $2000 per square metre to calculate the estimate. What type of estimating is this?

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BlackTom AI · Accepted Answer

The question describes the Project Manager creating an estimate for building a house using a constant rate of $2000 per square metre. This prompts us to identify the estimating approach being used.

First, consider what parametric estimating involves: it applies a unit rate (a parameter) to a measurable attribute of the project to generate an overall estimate. In this case, the measurable attribute is the floor area in square metres, and the unit rate is $2000 per square metre. By multiplying area by this unit rate, the estimate scales with the size of the house, which is characteristic of a parametric model.

Next, contrast this with other common estimating methods to reinforce why parametric is the right fit here:
- Rough order of magnitude (ROM) estimates typically rely on high-level information and broad ranges rather than precise unit rates, so they would not use a precise per-area cost like $2000/m2.
- Analogous estimating would base the estimate on the actual costs of a previous similar project, using a direct cost comparison rather than a fixed unit rate; while it could lead to a per-square-metre figure, the defining feature of parametric estimating is the explicit unit cost applied to a measurable attribute, which is this scenario.
- Bottom-up estimating would require estimating every component (materials, labor, subcontractors) in detail and summing them, typically yielding a much more granular and potentially different result than a single unit-rate approach.
- Definitive or deterministic estimates usually imply a high level of detail and accuracy, derived from known quantities, which again contrasts with the use of a simple per-square-metre rate.

Additionally, the choice of a unit cost per area aligns with the fundamental concept of parametric estimation: leveraging a scalable, repeatable formula tied to a measurable project attribute to quickly generate an estimate.

In summary, because the estimator is applying a fixed unit rate to a measurable attribute (area) to derive the total, this approach reflects a parametric estimating method. If there were other options listed, they would likely represent approaches like ROM, analogous, bottom-up, or definitive estimates, each differing in granularity, basis, and application from the unit-rate, area-based calculation described here.

Centre for Engineering and Industrial Design Test - 2025

The Project Manager is creating an estimate for building a house. It is a house similar to what he builds often. He is using a figure of $2000 per square metre to calculate the estimate. What type of estimating is this?

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