Hypothesis Testing Of A Logical CER Complementing the issues of deriving a good database is the need to hypothesize what the CER should be.
Some analysts believe the hypothesis comes first, then the data search to build a good database.
Other analysts believe the data search comes first, and given the availability of data, the subsequent determination of a logical relationship or hypothesis occurs. Regardless of the position taken, the analyst must determine a logical estimating relationship. The analyst must structure the forecasting model and formulate the hypothesis to be tested. The work may take several forms depending upon forecasting needs. It involves discussions with engineers to identify potential cost driving variables, scrutiny of the technical and cost proposals, and identification of cost relationships.