![]() ![]() ![]() (E.g If it was a question like the price of a cup of coffee where the consequence of inaccuracy is trivial vs A forecast of Covid-19 case numbers used to plan for sufficient hospital beds, where we would need to be much more conservative and prefer to err on the side of caution.įor the rest of this article, we’ll use this a simple fictional example of budget planning exercise for a vacation to a fictional winter island country to answer the question of “ How Much Will My Holiday To Fantasy Island Cost ?” The tolerance for variability or desired certainty we want in the estimate.The availability and nature of supporting information used to make a meaningful estimate (e.g Consider the difference if we only had the historical cost by sqft of properties sold in a particular city but without any other granularity vs if we had a more comprehensive database of actual values of transacted property sales grouped by property type). ![]() what sort of house did you mean exactly?- is this a construction of a brand new house or a renovation of an existing house etc) The level of definition of the question and the underlying assumptions.Unfortunately a single figure estimate ignores the fact that the ‘true answer’ will likely be within a range of figures that will depend on it is tempting to provide a single figure estimate as the answer. How many covid-19 infection cases do we expect within the next 6 months ?.How much will this holiday set me back ?. ![]()
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