According to the PMBOK Guide (Project Management Body of Knowledge), specifically within the Project Schedule Management and Project Cost Management knowledge areas, Parametric Estimating is an estimating technique in which an algorithm is used to calculate cost or duration based on historical data and project parameters.
* The Calculation: Parametric estimating uses a statistical relationship between historical data and other variables. In this specific scenario, the calculation is straightforward:
$$\text{Total Hours} = \frac{\text{Total Units to be Produced}}{\text{Production Rate per Hour}}$$
$$\text{Total Hours} = \frac{12,000 \text{ units}}{120 \text{ units/hour}} = 100 \text{ hours}$$
* Application (Option A): The result of 100 hours is the mathematically accurate estimate derived from the provided parameters.
* PMI Context: This technique is often used for work that is highly repetitive and standardized. It provides a higher level of accuracy than Analogous Estimating, provided that the underlying data used in the parameter (the 120 units per hour) is reliable and scalable. It is frequently applied in manufacturing, software lines of code, or construction (e.g., cost per square foot).
In the PMI framework, Parametric Estimating can be applied to an entire project or specific parts of a project, in conjunction with other estimating methods, to refine the project ' s schedule and budget baselines.