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  - topic/estimating
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# Traditional Estimating Methods

Also "single-point estimation"
as opposed to the standard three-point.

"Traditional estimating methods"
as referenced frequently in [[this notebook]]
are those [[construction-estimating]] methods that produce:

* an _exhaustive_ and _specific_ bill of material
* a single, definitive final price for each bid item

Such methods lack the ability to intelligently express [[uncertainty]].

### Limitations of Traditional Estimating Methods

Traditional estimating methods, sometimes referred to as "Detailed Takeoff",
seek to detail all constituent subcosts,
including 100% itemized pricing by way of a *material extension*,
a complete list of all material included in the price.

For clarity and contrast to [[risk-oriented-estimating]],
which does not require itemized pricing,
I'll refer to these methods as "item-oriented estimating".

By popular belief, item-oriented estimating is the only "correct" way to estimate,
however few to no estimators create 100% "Detailed" estimates
as the effort would require a significant increase in estimating time
for little reward in overall **precision**.

> [!info] Pareto Principle
> The Pareto principle states that for many outcomes,
> roughly 80% of consequences come from 20% of causes.
> 
> In the case of estimating efficiency, this means that optimal strategy
> is to focus on the 20% of estimating effort
> representing 80% of the overall efforts contribution to the total.

It is popular to dismiss alternate estimate models as potentially inaccurate,
but this dismissal fails to acknowledge
the potential for _much greater_ inaccuracy in item-oriented methods.
While an estimate based on item extension is 100% **precise**,
in that it computes to single final number,
the method has no such inherent guarantee of **accuracy**.
It relies on the estimator to miss absolutely nothing,
and to adjust for all labor conditions and market factors _exactly_.

Most estimators wouldn't rate their margin of error at less than 10%,
though most would refuse to answer anyway (see [[estimating-culture]]).
