The Estimating Accuracy Trumpet

Application & Data Requirements - 1

Gross Comparison (Order of Magnitude)

·         Used for initial evaluations only

·         A very approximate estimate

·         Based on some previous experience

·         With some macro adjustments

·         Or factored on a single parameter

·         Such as size of some sort, or perhaps a tentative estimate of duration and people involved

·         Typical accuracy range -25% to +75%

Application & Data Requirements - 2

Parametric (top down)

·         Used as part of economic study, viability, etc

·         And for comparing alternative options

·         Based on "functional design", initial work on component diagrams, "use case" diagrams, preliminary flow sheets, etc

·         Factored on parameters relevant to each identified component

·         Plus judicious allowances for the circumstances

·         Expectation of significantly higher accuracy

·         Typical range -15% to +25%

 

Application & Data Requirements - 3

Composite

·         Used for justifying an application for funding

·         And subsequent for design cost control checking

·         Especially on long, difficult or high-cost projects

·         Based partly on parametric data and partly on actual quantities (detailed estimating)

·         Accuracy varies according to the amount and quality of relevant data available

·         But progressively higher than a simple parametric estimate

·         As parametric data gives way to quantitative data

·         E.g. range down to -15% to +20%

 

Application & Data Requirements - 4

Detailed

·         Used for bid proposals, bid evaluation, contract changes, extra work

·         Hence sometimes referred to as a check estimate

·         Based on well defined data, detailed plans, diagrams, drawings, specifications, specific project conditions, etc

·         Normally the highest level of accuracy

·         Meaning that the range is narrowest

·         Typical accuracy -5% to +10%

 

Superdigitation - 1

A common disease

·         Almost all estimates are the result of some calculation or other

·         As we have seen in the different estimating approaches

·         With calculators so handy

·         It is easy to copy down the answer without a second though

·         This can give the uninitiated observer a false sense of accuracy

·         With no feel for the range involved

 

Superdigitation - 2

Example 1

·         In an order of magnitude estimate (-25%/+75%)

·         A calculated value of $187,654.32

·         Could range from $160,000 to $330,000

·         Hence a "rounded" entry of $200,000 is appropriate

Example 2

·         In a detailed estimate (-5%/+10%)

·         A calculated value of $187,654.32

·         Could range from $178,300 to $206,500

·         Hence an entry of $188,000 or $187,500 is appropriate

 

Wise Words Indeed

Good advice from the past

"It is the mark of an educated mind to rest satisfied with the degree of precision that the nature of the subject admits, and not to seek exactness where only an approximation is possible"