heard it here first!
A way of comparing two projects with equal risk & considering only cost & benefit. Only one is to be chosen.
One project is running a cable some distance, the other is renovating a shop.
E is your estimate that you will need this done within 10 years or so, on a scale of 1 to 9 with 9 being more likely.
P is “proceed”, a higher value means you should proceed.
B is your perceived benefit which you assign on a scale of 1 to 9, with 9 being better.
C is your cost, on a scale of 1 to 9 with 9 being a higher cost & worse for you. You pretty well know what the time & material cost will be. The others are estimates, guesses, based on your experience.
So, P = ExB/C.
As E or B goes up you should proceed, as C goes up you should not.
Renovating my shop is more necessary than laying a cable so I assign E for the shop at 8 & E for the cable at 1.
Similarly for B, it’s 9 for the shop & 3 for the cable.
Finally for C, it’s 2 for the shop & 9 for the cable.
P for the shop is 8x9/2= 36.
P for the cable is 1x3/9= 1/3.
Do the shop, it’s not even a close contest with my numbers & estimate.
Note that your assessments of these values are almost certainly different than mine.
Adding risk is not that hard, for example the risk of my cutting a gas line while laying cable vs. wrecking my shop by removing a load-bearing column.
Can anybody think of a basic flaw in this idea?
A way of comparing two projects with equal risk & considering only cost & benefit. Only one is to be chosen.
One project is running a cable some distance, the other is renovating a shop.
E is your estimate that you will need this done within 10 years or so, on a scale of 1 to 9 with 9 being more likely.
P is “proceed”, a higher value means you should proceed.
B is your perceived benefit which you assign on a scale of 1 to 9, with 9 being better.
C is your cost, on a scale of 1 to 9 with 9 being a higher cost & worse for you. You pretty well know what the time & material cost will be. The others are estimates, guesses, based on your experience.
So, P = ExB/C.
As E or B goes up you should proceed, as C goes up you should not.
Renovating my shop is more necessary than laying a cable so I assign E for the shop at 8 & E for the cable at 1.
Similarly for B, it’s 9 for the shop & 3 for the cable.
Finally for C, it’s 2 for the shop & 9 for the cable.
P for the shop is 8x9/2= 36.
P for the cable is 1x3/9= 1/3.
Do the shop, it’s not even a close contest with my numbers & estimate.
Note that your assessments of these values are almost certainly different than mine.
Adding risk is not that hard, for example the risk of my cutting a gas line while laying cable vs. wrecking my shop by removing a load-bearing column.
Can anybody think of a basic flaw in this idea?
