Allowing for Inaccuracy in Estimates
The more knowledge the estimator has, the better the estimate. And the better the estimate, the less allowance needs to be made for inaccuracy. However, allowances for inaccuracy don't make up for a lack of knowledge. The allowances, at best, only reduce the consequences of inaccurate estimates. And these allowances come at a cost.
Miss Jones manages a small shop that sells and services computer hardware for the small businesses in her city. Miss Jones is bidding on a Request For Proposal (RFP) from a local business. The RFP calls for hardware and labor that will cost about $40,000. Miss Jones isn't completely certain that her proposed hardware will meet the customer's requirements and, because the RFP asks ...
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