ABSTRACT
In this chapter we present parametric cost estimating, analogy, and bottom-up build for determining costs throughout a typical product development cycle. Detailed examples and an examination of the strengths and weaknesses of each technique and its appropriate usage in the product life cycle are discussed. Some historical examples based on industry data are presented for analogy-based estimation. Parametric cost examples developed using Excel are presented to demonstrate this technique. Lastly, examples of bottom-up or detailed engineering builds are presented. For each of the techniques, the process for developing the estimate is presented. Each of these three techniques has some applicability for the early concept of preliminary design estimates. As the product becomes more mature, the bottom-up build is the appropriate technique.
