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What is reference class estimating?
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Reference class estimating, also called reference class forecasting, is a method that uses the data from previous similar project or tasks to establish a probability distribution that can be the basis for forecasting he planned activities or project. The use of this historical data provides strong empirical basis to support probabilistic estimates. However, new or emerging knowledge or unique circumstances of your particular project should be taken into account. For example if you are introducing a new technology, you may need to add wider range of uncertainty to those activities that it will directly affect.
Another issue to consider when looking at reference classes is that it only provides the range of outcomes for previous projects and provides no context into the root causes of the variations and what steps you can take to improve your processes and minimize your chance of cost and schedule overruns.
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