Practical application of reference class forecasting for cost and time estimations: Identifying the properties of similarity

Tom Servranckx, Mario Vanhoucke and Tarik Aouam

European Journal of Operational Research, 2021, vol. 295, issue 3, 1161-1179

Abstract: Many project managers underestimate that todays projects are subject to various risks, which might lead to enormous cost overruns and project delays. In the domain of project forecasting, Reference Class Forecasting has been introduced as a method to bypass human judgement by applying an uplift that is based on the forecast errors of similar historical projects. In this research study, we aim to identify the possible drivers of project similarity based on interviews with 76 project managers. Also, we evaluate the performance of Reference Class Forecasting as a project forecasting technique from both a cost and time perspective. Based on an empirical study of 52 real projects, the accuracy of Reference Class Forecasting is successfully demonstrated by implementing a method that considers both the intra- and inter-accuracy of reference classes. The accuracy increases when more project properties are considered, however, a higher number of project properties decreases the size of the reference classes and thus reduces the reliability of the results.

Keywords: Project management; Project forecasting; Reference class forecasting; Real project data; Project similarity (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0377221721002939
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:295:y:2021:i:3:p:1161-1179

DOI: 10.1016/j.ejor.2021.03.063

Access Statistics for this article

European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati

More articles in European Journal of Operational Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().