Reference class forecasting

Abstract

The definition of project success according to the standard published by the project management institute is meeting customers' expectations without exceeding the desired requirement such as cost, duration, and scope. However, executing projects on time following a planned framework and budget is a challenging aspect of project management. Reference class forecasting is a method that studies the overall view of certain projects by forecasting similar projects rather than focusing solely on the considered project. This method allows a project manager to avoid errors due to human judgment by basing the forecast on similar projects. It also assists to take decisions under uncertainties through assessing the risk of the planned project. In this article, the RCFM method developed by Kahneman and Tversky will be presented. That will be followed with the application of such a method and its limitation.