Airport Capital Improvements: A Business Planning and Decision-Making Approach (2014) / Chapter Skim
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Pages 19-24
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From page 19... ...
19 The parametric cost-estimating methodology consists of developing mathematical relationships between cost, the dependent variable, and a number of independent variables that are hypothesized to be the drivers for the cost. Strengths of the parametric cost-estimating technique include the following (GAO 2009, p.
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From page 20... ...
20 Airport Capital Improvements: A Business Planning and Decision-Making Approach the model is based on a hypothesis of a relationship between cost and cost driver. During the model development, the selection of CIVs is altered in an iterative manner, until a cost model is derived that is robust and meets the target statistical metrics of quality of fit.
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From page 21... ...
Parametric Cost Estimating 21 • Number of floors: This variable would be used for certain airport buildings. • Number of intersections: This variable would serve as a high-level proxy for the amount of signage associated with new runway, taxiway, or apron construction (see also "signs per intersection")
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From page 22... ...
22 Airport Capital Improvements: A Business Planning and Decision-Making Approach formulas are linear. This method of linear regression fits a straight line through each data set to minimize the sum of the squares of the differences between the data points and the fitted line.
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From page 23... ...
Parametric Cost Estimating 23 Table 3 provides a summary of statistical metrics that can be used to test the quality of fit and statistical significance of the model, along with rules-of-thumb for satisfactory performance. More detailed explanations of the statistical measures identified in Table 3 follow: • Logic: Logic is used to develop hypotheses that are tentatively advanced to account for particular facts.
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From page 24... ...
24 Airport Capital Improvements: A Business Planning and Decision-Making Approach Each CER must be evaluated both statistically and subjectively, based on its applicability to the project type in light of other cost drivers and their effects on cost. Ease of collecting data should also be taken into account.
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