Appendix C: Cost Estimating Methodologies

NASA cost Estimating Handbook Version Appendix C cost Estimating Methodologies C-1 February 2015 Appendix C: cost Estimating Methodologies The cost estimator must select the most appropriate cost Estimating methodology (or combination of Methodologies ) for the data available to develop a high quality cost estimate. The three basic cost Estimating methods that can be used during a NASA project s life cycle are analogy, parametric, and engineering build-up (also called grassroots ) as well as extrapolation from actuals using Earned Value Management (EVM). This Appendix provides details on the following three basic cost Estimating methods used during a NASA project s life cycle: Analogy cost Estimating Parametric cost Estimating Simple Linear Regression (SLR) Models Simple Nonlinear Regression Models Multiple Regression Models (Linear and Nonlinear) Model Selection Process Summary: Parametric cost Estimating Engineering Build-Up cost Estimating (also called Grassroots ) Estimating the cost of the Job P

Cost data from an existing system that is technically representative of the new system to be estimated serve as the Basis of Estimate (BOE). Cost data are then subjectively adjusted upward or downward, depending upon whether the subject system is felt to be more or less complex than the analogous system.

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