  The author explored estimation by analogy (EBA) as a means of estimating the
cost of international freight consignment. A version of the k-Nearest Neighbors
algorithm (k-NN) was tested by predicting job costs from a database of over
5000 actual jobs booked by an Irish freight forwarding firm over a seven year
period. The effect of a computer intensive training process on overall accuracy
of the method was found to be insignificant when the method was implemented
with four or fewer neighbors. Overall, the accuracy of the analogy based
method, while still significantly less accurate than manually working up
estimates, might be worthwhile to implement in practice, depending labor costs
in an adopting firm. A simulation model was used to compare manual versus
analytical estimation methods. The point of indifference occurs when it takes a
firm more than 1.5 worker hours to prepare a manual estimate (at current Irish
labor costs). Suggestions are given for future experiments to improve the
sampling policy of the method to improve accuracy and to improve overall
scalability.
