Why your project cost estimates are almost certainly destined to fail
In short: Richard de Neufville of MIT explains why forecasting is inherently flawed. By examining historical cost estimates, this video illustrates the persistent gap between predicted budgets and actual outcomes, offering a sobering look at why we must expect our projections to be wrong.
In the Fall 2021 course IDS.333 Risk and Decision Analysis, instructor Richard de Neufville argues that the assumption of accurate forecasting is a fundamental error. The lecture series uses historical data to demonstrate that cost estimates consistently deviate from reality, highlighting the systemic nature of these inaccuracies.
This exploration is essential for anyone involved in project planning or risk management. By acknowledging that forecasts are 'always' wrong, decision-makers can shift their focus from seeking impossible precision to building more resilient strategies that account for inevitable uncertainty.
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Sources
- Summary by Intellect · source: Unit 2: the Forecast is always wrong, Video 1: Cost Estimates
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