Great summary Alan. In your hypothetical Swanson's Rule slide its a bit scary your Swanson Mean ($308mm) is significantly higher than your mid case ($261mm). I wouldn't recommend this method for justifying a bid. 😂😂 "Averages" are typically overly-influenced by big numbers.
Mike - using Swanson's rule takes both high and low cases into account which I believe is necessary - the tricky bit as you say is choosing appropriate high and low values for the estimation - a high case which is too high will as you say skew the result upwards a probabilistic / Monte-Carlo approach may be better - I do feel that using a single number from a best /most likely case will also have its flaws as it does not take uncertainty into account , however many managers do like a single number
Great summary Alan. In your hypothetical Swanson's Rule slide its a bit scary your Swanson Mean ($308mm) is significantly higher than your mid case ($261mm). I wouldn't recommend this method for justifying a bid. 😂😂 "Averages" are typically overly-influenced by big numbers.
Mike - using Swanson's rule takes both high and low cases into account which I believe is necessary - the tricky bit as you say is choosing appropriate high and low values for the estimation - a high case which is too high will as you say skew the result upwards a probabilistic / Monte-Carlo approach may be better
- I do feel that using a single number from a best /most likely case will also have its flaws as it does not take uncertainty into account , however many managers do like a single number