vault backup: 2025-12-18 17:14:55

risk-management-for-construction-estimating.md

@@ -15,84 +15,15 @@ tags:
 
 Cross-topic of [[risk-management]] and [[construction-estimating]].
 
-## Prioritizing Tasks
-
-ROE prioritizes estimating tasks by their contribution to _cost certainty_.
-
-### Estimating as Risk Mitigation
+## Estimating as Risk Mitigation
 
 * reduce risk of wasted estimation effort due to bid loss
   (prefer lower bid)
 * reduce risk of project overrun
   (prefer higher bid)
 
-Estimating resources are allocated by Return on Mitigation (RoM)
+Estimating resources should be allocated
+according to Return on Mitigation (RoM),
+that is, their contribution to _cost certainty_.
 
-### Determining Necessary Detail
-
-ROE determines the appropriate level of [[estimating-detail]]
-given an organization's [[risk#Risk Tolerance]].
-
-#### EVI Takeoff
-
-Expected value of information (EVI)
-
-#### Takeoff Optimization
-
-For systems where EVI analysis determines manual takeoff is still necessary,
-optimizations can be made to decrease the required effort of takeoff,
-and thus the opportunity cost of takeoff.
-
-See [[optimal-estimating-patterns]] for more.
-
-# Estimating Detail
-
-The acceptable level of detail of an estimate
-in [[construction-estimating]] is a contentious subject.
-What's worse, estimators often disagree
-on what makes an estimate more detailed than another.
-
-The commonly repeated answer is this:
-
-> As detailed as possible,
-> given required turnaround and available estimating resources.
-
-This analysis is flawed
-because it implies more time always ought to be preferred,
-when the reality is that when considering larger organizational factors,
-ideal estimate certainty is likely far lower than most expect.
-
-The correct answer involves optimizing for these factors:
-* value of increased bid certainty
-* value of increased estimate volume
-
-An estimate's detail is irrelevant to its quality.
-A less detailed estimate is a more [[risk|risky]] bid,
-but it is not the role of the estimator to determine acceptable risk.
-
-## Experiment
-
-Perform a system takeoff (lighting for example) in exacting detail,
-the maximum amount you would ever consider using,
-and measure the time required to do so,
-as well as the cost of the scope.
-
-Have another estimator takeoff the same scope
-using the proposed time saving strategy.
-
-Repeat the test on additional projects.
-
-Treat the detailed takeoff as the true value
-and find the error of the time saving strategy.
-
-$\frac{d\sigma}{dt}$
-
-### Expectation
-
-Time-saving strategies will overestimate or underestimate detailed takeoff
-depending on the assumptions used in their creation.
-
-## Human Error
-
-It is commonly understood that a "detailed takeoff"
-is more "accurate" than a square foot estimate.
+$\text{Efficiency} = -1 \times \frac{d\sigma}{dt}$