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Figure 7-8: Formulas for Figure 7-7.

Figure 7-8: Formulas for Figure 7-7.

Notice that this calculation does not suffer from unit or scale effects because the ratio of actual,to forecast is a dimensionless number and we are finding the percent error rather than the "real" error.

One caution remains. While this technique will allow one to aggregate dissimilar data and, thereby, measure the degree of random error and bias faster than when using differences, care must be exercised to aggregate only data for which there is good reason to believe that the amount of bias and uncertainty is roughly the same for all resource estimations. The Lotus 1-2-3® formulas for Figure 7-7, again translated into Excel®, are shown in Figure 7-8.

A final note: At the beginning of this discussion, we made the assumption that estimation errors were "honest." That assumption is not necessary. If a manager suspects that costs are purposely being under- or overestimated, it is usually not difficult to collect appropriate data and calculate the tracking signal for an individual estimator—or even for an entire project team. If it is known that such information is being collected, one likely result is that the most purposeful bias will be sharply reduced.

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