Order of magnitude

I have a little bit of difficulty with this formula here,

If order of magnitude spread is -50% to +50%

And the actual cost of project is $100,000
Then 50% of it is $50,000

So the range will be $50,000 to $150,000,

 

However on some prep material that I have found, a project with target price of $100,000, has a range of  $75,000 - $175,000 with this level of estimation. Is this because anything higher than %50 i.e. 75% is also considered rough order of magnitude?


Please help me understand this.

By the way I think I found a typo in my prep book , on page 169 of "The PMP Exam, how to pass on your first try, Andy Crowe", it says the order of magnitude estimate ranges from -50% to +100%, do you think that's a typo or am I missing something?

Hi


Yes you are right.  Order of magnitude, in every book it differs.  As per PMBOK v 4, it is mentioned 50% (+ or -) and we should go by PMBOK.


Also, it is mentioned that definite magniture is 10% (+ or -) and budgted not mentioned. In some other book it is mentioned that -10% to 25%.


If anyone is having different openion, please let me know. Thanks


 


 


 

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