What is a significant feature of parametric costing models?

Parametric costing models are significant because they rely on statistical data and historical comparisons to estimate costs. This approach uses established relationships between various cost elements and project parameters to develop cost estimates. By leveraging historical data, parametric models can provide more accurate and reliable estimates, as they often incorporate a wealth of information gathered from past projects, allowing for a more systematic and quantitative approach to cost estimation.

In contrast to models that rely on expert judgment alone, parametric costing benefits from an objective, data-driven foundation. Furthermore, unlike some simplistic models, parametric costing can account for various cost drivers and does not limit its applicability to specific types of projects, such as only software projects. Such models also typically include considerations for inflation by utilizing appropriate indices or adjustments based on historical cost trends. Thus, the reliance on statistical data and historical comparisons distinguishes parametric costing models in program management.