Estimation Methods | Different Types

Estimation methods can mean a few different things depending on whether you’re asking in project management, statistics, or general decision-making.

Here’s a structured breakdown:

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🔹 1. In Project Management / Software Development

Used to forecast time, cost, or effort.

• Analogous Estimating → Use data from past similar projects.

• Parametric Estimating → Use measurable parameters (e.g., cost per sq. ft).

• Bottom-Up Estimating → Break down work into small tasks and sum estimates.

• Top-Down Estimating → Start with overall project scope and break into chunks.

• Three-Point Estimating (PERT) → Use optimistic, pessimistic, and most likely values.

• Expert Judgment → Leverage knowledge from SMEs (subject matter experts).

• Agile Methods:

  • Planning Poker

  • T-Shirt Sizing (S, M, L, XL)

  • Story Points

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🔹 2. In Statistics & Data Science

Used to estimate parameters (like mean, variance) from data.

• Point Estimation → A single value estimate (e.g., sample mean for population mean).

• Interval Estimation → A range of values (e.g., confidence interval).

• Maximum Likelihood Estimation (MLE) → Finds parameter values that maximize likelihood of data.

• Bayesian Estimation → Combines prior knowledge with observed data.

• Method of Moments → Matches sample moments to population moments.

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🔹 3. In Cost / Engineering

Used for construction, mechanical, or infrastructure projects.

• Preliminary Estimation (early rough order of magnitude).

• Detailed Estimation (with BOQ / material breakdown).

• Parametric Estimation (e.g., cost per unit of floor area).

• Quantity Take-Off (QTO) → Line-by-line measurement of work.