Definition:
Relying on outdated, incomplete, or non-representative historical data to estimate project costs and timelines.
Key Components:
- Data Validation: Ensuring past data is accurate and applicable.
- Project Similarity Check: Confirming past projects are comparable.
- Market Adjustment Factors: Updating costs for inflation and market shifts.
Use Cases/Industries:
- Construction: Using old labor productivity rates for new projects.
- Energy Development: Comparing outdated fuel price forecasts.
- Manufacturing: Relying on past material costs that are no longer valid.
Advantages:
- Can Provide Insight: If well-maintained, historical data aids planning.
Challenges:
- Risk of Misinformation: Inaccurate data can mislead budgeting.
- Needs Continuous Updating: Requires ongoing adjustments for market conditions.
Related Terms:
Benchmarking, Data Integrity, Cost Forecasting
Example:
A solar farm developer underestimated project costs by 12% due to reliance on outdated labor rates from previous projects.
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Synonyms:
Flawed Data Analysis, Outdated Cost Assumptions, Misleading Benchmarking
