34 lines
987 B
Markdown
34 lines
987 B
Markdown
---
|
|
id: risk-oriented-estimating
|
|
aliases: []
|
|
tags: []
|
|
---
|
|
|
|
# Risk Oriented Estimating
|
|
|
|
Risk-Oriented Estimating (ROE), is a methodology for [[construction-estimating]] which
|
|
* prioritizes estimating tasks,
|
|
* determines necessary [[estimating-detail]]
|
|
|
|
ROE leans heavily on [[expected-value-of-perfect-information]],
|
|
which challenges the natural tendency to shy from uncertainty
|
|
with the reality of the cost of certainty.
|
|
|
|
ROE does not endorse common shortcuts that round up to "cover" uncertainty,
|
|
as these ultimately _increase_ risk by inflating the apparent project cost,
|
|
increasing the probability of loss to a competitor.
|
|
|
|
> Bid risk may fit a [Taleb distribution](https://en.wikipedia.org/wiki/Taleb_distribution).
|
|
|
|
> Actuarial Science
|
|
|
|
## Prioritizing Tasks
|
|
|
|
ROE prioritizes estimating tasks by their contribution to _cost certainty_.
|
|
|
|
## Determining Necessary Detail
|
|
|
|
ROE determines the appropriate level of [[estimating-detail]]
|
|
given an organization's [[risk#Risk Tolerance]].
|
|
|