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I am working through Rita (8th edition) and there was the following question:

Which of the following is an example of parametric estimates?

The correct answer is Dollars per module. Of course I was able to exclude the other possibilities, however I don't know what's the meaning of Dollars per module.

Can you explain it please?

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The idea behind a parametric estimate is that you establish the measurement you are interested in against a unit that is meaningful to you. They are using the term module to represent a unit in generic terms. The unit could be square feet or square yards, produce release, gallons, or something like that. You are essentially creating a ratio in the most simplest terms so that you can compare equally one effort to the next. For example, burning 300 gallons of fuel to get from point A to B and comparing that to burning 500 gallons to get from point C to D is not meaningful. However, if you break it down to miles / gallon, then you can compare the two different driving efforts.

Here's an example:

Apartment A rents for $600. Apartment B rents for $800. You are trying to establish a rent price for Apartment C. They are all in the same geographic area. How do you do this?

In this industry, they establish the parametric of dollars / square foot.

If Apartment A is 1,000 sq. ft. and B is 1,300 sq. ft. and C is 2,000 sq. ft., what would you charge for apartment C?

Maybe $1,200 assuming all else is equal??

  • Thanks for your answer. If I translate the word module, I can't get a suitable meaning ;-). – Marco Daniel Dec 13 '13 at 14:03

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