Certificate in Business Data Analytics (CBDA) — Question 40

The analytics team has been asked to provide an estimate of the number of customers they expect to have in 12 months. They debated how accurate that figure needs to be and determined that based on the availability of good data, they could predict within + or - 10%.
This is an example of a:

Answer options

• A. Delphi estimate
• B. Definitive estimate
• C. Parametric estimate
• D. ROM estimate

Correct answer: D

Explanation

The correct answer is D, as a ROM (Rough Order of Magnitude) estimate typically has a range of accuracy between -25% to +75%, but in this case, the team is comfortable with a tighter range of +/- 10%. The other options, such as Delphi, Definitive, and Parametric estimates, suggest a different level of precision or methodology that does not align with the described scenario.