Chapter 10 introduces cost estimation methods. Managers use cost estimation to m

Question

Chapter 10 introduces cost estimation methods. Managers use cost estimation to measure relationships based on previous costs incurred for the same production activity levels.

On pages 376-379, four basic cost estimation methods are introduced:

Industrial Engineering Method

Conference Method

Account Analysis Method

Quantitative Analysis Method

Please respond to all of the following prompts:

Choose one of these four methods to discuss in detail. In your main response posting, be sure to address the following elements for the method chosen:

Important information provided

Assumptions used

Advantages and/or disadvantages associated with the method

Explanation / Answer

The quantitative analysis method provides rigorous mathematical methods to develop a function using its past data. This can be done using tools like Regression analysis or Time series forecasting method.

Quantitative analysis is a business or financial analysis technique that seeks to understand behavior by using complex mathematical andstatistical modeling, measurement and research. By assigning anumerical value to variables, quantitative analysts try to replicate reality mathematically.

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