From 0e63ec59c65bc553cfd8bcca77f7841753a35817 Mon Sep 17 00:00:00 2001 From: Zane Meyers Date: Sat, 18 Apr 2026 20:47:30 -0400 Subject: [PATCH] vault backup: 2026-04-18 20:47:30 --- three-point-estimation.md | 23 ++++++++++++++++++++ timestamped/2026-04-18_18-44-11.md | 34 ++++++++++++++++++++++++++++-- 2 files changed, 55 insertions(+), 2 deletions(-) create mode 100644 three-point-estimation.md diff --git a/three-point-estimation.md b/three-point-estimation.md new file mode 100644 index 0000000..8447a6f --- /dev/null +++ b/three-point-estimation.md @@ -0,0 +1,23 @@ +--- +id: +aliases: [] +title: Three-Point Estimation +tags: [] +--- +# Three-Point Estimation + +* best-case or optimistic +* worst-case or pessimistic +* most-likely + +[Wikipedia](https://en.wikipedia.org/wiki/Three-point_estimation) + +[PMI](https://www.projectmanagement.com/wikis/368763/3-points-estimating) + +![](https://www.tutorialspoint.com/estimation_techniques/images/three_point_estimation.jpg) + +A [[risk]]-neutral party would set selling price at the most likely. +The difference between the pessimistic estimate and selling price +is the [[value-at-risk]]. + +Three-point estimating is considered the bare minimum in most industries. \ No newline at end of file diff --git a/timestamped/2026-04-18_18-44-11.md b/timestamped/2026-04-18_18-44-11.md index c061716..22f48b7 100644 --- a/timestamped/2026-04-18_18-44-11.md +++ b/timestamped/2026-04-18_18-44-11.md @@ -14,8 +14,8 @@ but I think often of [[construction-estimating|estimators]] like I once knew well, who somehow managed to be in the industry for decades while believing that it is poor estimating -to accept any risk in a bid, -that all uncertainty must be clarified. +to accept any [[risk]] in a bid, +that all [[uncertainty]] must be clarified. Of course, they didn't believe that with their actions, @@ -25,4 +25,34 @@ like you do when you're a new estimator who barely knows what the word means, you're just happy to be out of the field where it's hot and no one is ever happy. +But you've got a brain between your ears, +so you ask the estimator--- +we'll call him Steve--- +you ask Steve what the limit is, +because obviously some scope +Steve cranes his neck and squints at you, mouth half open. +This is how he expresses incredulity. +With that invitation, you continue: +Your time costs your owners about fifty dollars an hour +including salary and burden, +and Steve's time is worth even more. +Between the time spent +* quadruple checking that the question isn't answered in the documents, +* considering whether you should wait until you have more questions, +* typing the RFI and sending the email, +* parsing the engineer's inevitably unhelpful response, +* consulting with Steve for his interpretation, +* and so on and so on, +it's a safe bet that the average cost +to officially resolve uncertainty of any magnitude +is in the hundreds of dollars. + +Assuming a contract win rate of fifty percent, +any cost of [[risk-mitigation]] +greater than half the reduction in [[value-at-risk]] +represents a loss. + +Steve moves the goalposts, +says of course he didn't mean "the small stuff", +and also that you're overcomplicating it.