64 lines
2.2 KiB
Markdown
64 lines
2.2 KiB
Markdown
---
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id:
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aliases: []
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tags:
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- topic/estimating
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- destiny/uncertain
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- status/incomplete
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- type/philosophy
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- authorship/original
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title: Traditional Estimating Methods
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---
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# Traditional Estimating Methods
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Also "single-point estimation"
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as opposed to the standard three-point.
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"Traditional estimating methods"
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as referenced frequently in [[this notebook]]
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are those [[construction-estimating]] methods that produce:
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* an _exhaustive_ and _specific_ bill of material
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* a single, definitive final price for each bid item
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Such methods lack the ability to intelligently express [[uncertainty]].
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### Limitations of Traditional Estimating Methods
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Traditional estimating methods,
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sometimes referred to as "Detailed Takeoff",
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seek to detail all constituent subcosts,
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including 100% itemized pricing by way of a _material extension_,
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a complete list of all material included in the price.
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For clarity and contrast to [[risk-oriented-estimating]],
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which does not require itemized pricing,
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I'll refer to these methods as "item-oriented estimating".
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By popular belief,
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item-oriented estimating is the only "correct" way to estimate,
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however few to no estimators create 100% "detailed" estimates
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as the effort would require a significant increase in estimating time
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for little reward in overall **precision**.
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> [!info] Pareto Principle
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> The Pareto principle states that for many outcomes,
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> roughly 80% of consequences come from 20% of causes.
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>
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> In the case of estimating efficiency, this means that optimal strategy
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> is to focus on the 20% of estimating effort
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> representing 80% of the overall efforts contribution to the total.
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It is popular to dismiss alternate estimate models as potentially inaccurate,
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but this dismissal fails to acknowledge
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the potential for _much greater_ inaccuracy in item-oriented methods:
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While an estimate based on item extension is 100% **precise**,
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in that it computes to single final number,
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the method has no such inherent guarantee of **accuracy**.
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It relies on the estimator to miss absolutely nothing,
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and to adjust for all labor conditions and market factors _exactly_.
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Most estimators wouldn't rate their margin of error at less than 10%,
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though most would refuse to answer anyway (see [[estimating-culture]]).
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