Calculate or guess? The answer is YES.
December 9, 2012 1 Comment
When required to make a decision, I have the option to produce simple calculations, guess, or even refuse to decide. What is better?
The answer depends on many circumstances, including:
- Complexity of the challenge.
- Usefulness of the conclusion.
- Individual ability / habits to analyze challenges.
- Time available.
I meet difficult challenges very often. What technique should I use? Should I work it out or should I guess?
Calculations are beneficial in terms of time and money in the following examples:
I am ready to spend my time on simple analysis and calculation in such cases.
Weinstein and Adam  advise guesstimating certain categories of challenges. A guesstimate is an informal English contraction of guess and estimate and is used to describe an estimate made without complete information. Another term for this is an educated guess at something for which no better information will become available.
There are a group of challenges called “Fermi problems” (after the great nuclear physicist) that will be accurate to within an order of magnitude. A mistake up to 10 times is acceptable. The examples are:
- How many people will potentially buy a new car next year in a city?
- How many gas stations between Boston and New York?
- How many people will come to buy my car if I advertize on the Internet?
- How many tennis balls can fit in a school bus?
- What score does John expect to receive on the exam?
- How long is Anna’s hair?
- How many times heavier than a rabbit is an elephant?
- How many customers visit a shop everyday?
I need to guesstimate in order to answer such questions.
The answer to the question in the title “Calculate or Guess?” is yes. I calculate when I have time and the ability, I guesstimate when a conclusion with order of magnitude is acceptable, and I trust my gut feeling in all other cases.
1. Lawrence Weinstein and John A. Adam, Guesstimation: Solving the World’s Problems on the Back of a Cocktail Napkin. 2008 Princeton University Press. ISBN 9780691129495