Using a Specific Model

Summary

This chapter deals with the usage of a specific model for estimating the cost of a product belonging to the product family (its population) for which the specific model was built.

It assumes that the values of all the causal variables are known with precision and certainty: taking into account imprecision and uncertainty will be dealt with in Chapter 18.

Even if the values of the causal variables are perfectly known, the cost cannot be, due to the fact that its value will be computed with a formula of which coefficients are only partially known with a perfect accuracy. It can be seen, in Volume 2, that their standard error can be computed.

This is the first cause of cost inaccuracy,which is fundamental because it cannot be escaped. This chapter will establish how this inaccuracy can be computed.

The study of the other causes of inaccuracy is postponed up to Chapter 18.