Question

What is generally the largest source of error in cost estimation?

Answer 1

Generally samples are taken during measurement of cost. And consequently, statistics derived from these samples, are subject to the two kinds of errors systematic errors (biases) and random errors.

1. Systematic errors are those that cause a bias.They are often affected by a number of biases that can be either in favour or against.
2. The random errors are related to probabilistic considerations. These errors (variations showing no reproducible pattern) cannot generally be predicted and hence they cannot be avoided or eliminated. However, their effect can be understood on the basis of a theory of statistical errors.