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Chapter 10: Quantify some uncertainty > Clarify associated conditions

Clarify associated conditions

All probability distributions used for making practical decisions are conditional. At the very least we usually assume that the world is not going to end in the next few minutes. The question addressed in this section is ‘how do we clarify important assumptions best treated as conditions?’

The short answer is ‘this is best done earlier, as part of the qualitative analysis phases’, with a focus in the identify phase as discussed in Chapter 7. However, everyone involved in the estimation process needs reminding at this point.

For example, in a BCS context, the BCS proprietor needs to explain to customers that all his ‘target maximum’ estimates are conditional on no ‘very bad luck for the customer’ scenarios, e.g. he discovers a floor to be retiled needs replacing. As another example, in a Highways Agency quick re-estimate context there are three categories of uncertainty addressed as separate sources, and a set of assumptions defining uncertainty which the estimator can treat as conditions because they are beyond his ‘project’. Uncertainty that is owned by the Highways Agency at portfolio level or the government is one example. Even in a high clarity context like the BP North Sea examples, it is important to be clear that specific conditions like ‘no change in ....


  

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