Section: Volume B
Explanation:
7.3.2.4 Historical Relationships
Any historical relationships that result in parametric estimates or analogous estimates involve the use of project characteristics (parameters) to develop mathematical models to predict total project costs. Such models may be simple (e.g., residential home construction is based on a certain cost per square foot of space) or complex (e.g., one model of software development costing uses multiple separate adjustment factors, each of which has numerous points within it).
Both the cost and accuracy of analogous and parametric models can vary widely. They are most likely to be reliable when:
Historical information used to develop the model is accurate,

Parameters used in the model are readily quantifable, and

Models are scalable, such that they work for large projects, small projects, and phases of a project.

Process: 7.3 Determine Budget
Definition: The process of aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline.
Key Benefit: The key benefit of this process is that it determines the cost baseline against which project performance can be monitored and controlled.
Inputs
1. Cost management plan
2. Scope baseline
3. Activity cost estimates
4. Basis of estimates
5. Project schedule
6. Resource calendars
7. Risk register
8. Agreements
9. Organizational process assets
Tools & Techniques
1. Cost aggregation
2. Reserve analysis
3. Expert judgment
4. Historical relationships
5. Funding limit reconciliation
Outputs
1. Cost baseline
2. Project funding requirements
3. Project documents updates

Explanation/Reference:
Explanation:
Process: 6.2 Define Activities
Definition: The process of identifying and documenting the specific actions to be performed to produce the project deliverables.
Key Benefit: The key benefit of this process is to break down work packages into activities that provide a basis for estimating, scheduling, executing, monitoring, and controlling the project work.
Inputs
1. Schedule management plan
2. Scope baseline
3. Enterprise environmental factors
4. Organizational process assets
Tools & Techniques
1. Decomposition
2. Rolling wave planning
3. Expert judgment
Outputs
1. Activity list
2. Activity attributes
3. Milestone list