Which LCC method uses a hierarchical structure or classification scheme as a basis for the estimates?

Which LCC method uses a hierarchical structure or classification scheme as a basis for the estimates?

• A. Expert Judgement
• B. Taconomy method
• C. Parkinsonian technique
• D. Top down

Answer: (B)

Organizing the cost estimates by a hierarchical classification of items is what the taxonomy method does. In this approach, the system is broken down into a tree of categories and subcategories (for example, subsystems, assemblies, components), and each class has associated cost data or cost drivers. By mapping every element to a class in the taxonomy, you can assign consistent costs per class and then aggregate those costs up the hierarchy to obtain total life cycle costs. This structure makes it easier to reuse data, compare like items, and systematically refine estimates as you gather more information. Expert judgement relies on opinions from individuals rather than a structured classification, so it doesn’t inherently use a hierarchical scheme. The Parkinsonian technique isn’t a standard LCC method tied to a hierarchical taxonomy, and top-down approaches start from a total and allocate downward without requiring a formal classification tree. The taxonomy method uniquely bases estimates on the organized, hierarchical classification of items.

Organizing the cost estimates by a hierarchical classification of items is what the taxonomy method does. In this approach, the system is broken down into a tree of categories and subcategories (for example, subsystems, assemblies, components), and each class has associated cost data or cost drivers. By mapping every element to a class in the taxonomy, you can assign consistent costs per class and then aggregate those costs up the hierarchy to obtain total life cycle costs. This structure makes it easier to reuse data, compare like items, and systematically refine estimates as you gather more information.

Expert judgement relies on opinions from individuals rather than a structured classification, so it doesn’t inherently use a hierarchical scheme. The Parkinsonian technique isn’t a standard LCC method tied to a hierarchical taxonomy, and top-down approaches start from a total and allocate downward without requiring a formal classification tree. The taxonomy method uniquely bases estimates on the organized, hierarchical classification of items.