A paradigm for Cost Estimation and Price Determination FACE and LIPS are one and the same. In many industries price is cost plus profit. In others cost is price minus discount. They represent a value of a liquid entity which is exchanged between a buyer and a seller for another entity of lesser liquidity.
Reference describes the activities in which data is collected and organized.
Inference describes the activities in which the reference data is being processed into its maximum conclusion potential. The Past Based approach, or for short, the Past Approach, is based on summing up the seller's cost, which plus profit determines buyer's cost, or price value. It is based on what happened in the past. The Present Based Approach, or for short, the Present Approach, is based on comparing the priced entity to similar entities for which price or cost is known. It is based on what happens contemporarily elsewhere.