Some authors seem to imply that all estimates should be expected to fall within the confidence interval. Others adopt a more probabilistic perspective and assume that the intervals represent a range of two standard deviations, encompassing about 95 percent of the estimates (11). Still others have suggested that 80 or 90 percent of the estimates fall within the depicted range (12). The implied assumption of the figure is that the estimates are symmetrically distributed around the actual costs.A study of estimates for process plants revealed a pattern of estimation deviation in sharp contrast to the usual expectation of actual cost falling symmetrically within established ranges of estimated cost (9), Figure 3. The points on the figure are developed by dividing each estimated project cost by the project’s total actual cost. A value of one indicates a perfectly estimated project. When the estimate is low (estimate < actual cost) produces a ratio value of less than one, or signifying cost overruns. Figure 3 contrasts the estimation experience of the studied plants with the typically assumed ranges illustrated in Figure 2. The V-shaped funnel at the top of Figure 3 approximates the typical assumption that estimates tend on average to equal actual project cost with uncertainty declining monotonically over the period of project definition. It is clear that, in the case of process plants, early estimates were much too low. The early estimates(conceptual) averaged less than one-half of actual cost. Based on more recent studies (8), it appears that a similar tendency is true in the case of transportation projects.
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