What is the range of accuracy for an Order of Magnitude estimate?

What is the range of accuracy for an Order of Magnitude estimate?

• A. +50% to -30%
• B. +75% to -50%
• C. +15% to -5%
• D. +30% to -15%

Answer: (A)

Order of Magnitude estimates are rough, early-stage cost guesses made with limited information. Because many unknowns exist—design scope, site conditions, inflation, labor rates—the expected accuracy is wide. The standard range is approximately +50% to -30% of the final cost, meaning the forecast could be as high as 1.5x or as low as 0.7x the actual cost. This level is used to screen options and decide whether to invest in more detailed studies; it is not a commitment. Other ranges are either too narrow for this stage or imply more precision than is typical at this point.

Order of Magnitude estimates are rough, early-stage cost guesses made with limited information. Because many unknowns exist—design scope, site conditions, inflation, labor rates—the expected accuracy is wide. The standard range is approximately +50% to -30% of the final cost, meaning the forecast could be as high as 1.5x or as low as 0.7x the actual cost. This level is used to screen options and decide whether to invest in more detailed studies; it is not a commitment. Other ranges are either too narrow for this stage or imply more precision than is typical at this point.