I have spent a little time planning different projects. I have seen that when setting out to do something that hasn't been done by you before, it helps to add a fudge factor. I did this during a job interview and predicted the timeline of a project to build a heavy duty engine more accurately than the team that was actually in charge of the heavy duty engine *cough a team of Daimler engineers cough*. I have also seen this lack of fudge factor blow up in my face *cough moving to D.C. and thinking I could get a nice apartment for less than $1,000 cough*.
The fudge factor is to multiply your expenses by 1.5 and multiply your resources by .75. If I had done this before moving to DC then I would have seen that my expenses were somewhere around 4.3k monthly and my income would have been more around 3.8k, which, it turns out, is almost dead on for my life in D.C.
Case study: becoming a millionaire in one year using the fudge factor. You need to make 1.5M to be a millionaire, because 1M*1.5=1.5M. And you have nine months to do it, because 1yr*.75=9mo. Now that you know your actual costs and the actual time you have to do it in, the rest of the planning phase is just number crunching and a little bit of reading.
1.5M/9mo means about .16666M per month needs to be netted. If you sell a product with a $6 profit (think $40 product) then you have to sell about 27k products each month. $.60 profit and you have to sell 277k products, and on and on and on. NOW! You know your profit margin and you know the width of your supply chain. Find a supply chain that can support 27k products moving through it per month: Off the top of my head, Walmart, Target etc. Find a product that you can move 27k per month at a $6 profit: Off the top of my head, nutritional supplements, shirts etc. Now I know what your saying/thinking... I don't know how to do any of that and I will fuck it up :( Yes, Mr./Ms. Negativity you will fuck some of it up and that's why there is a fudge factor.
Some of you who are reading this will think that is is not scientific and it isn't the way we should be planning projects in this day of high technology and easy data analysis. Well, first off, in science we use constants all the time, Plank's constant, 9.1m/s^2 etc. They are just things that make equations work out better, even though they are not completely accurate for all cases over all time. And if a constant is working to predict real world events then, it may not be pretty, but it is pretty useful -- and scientific. As far as technology and data are concerned, this just lumps all the rounding errors and unknown unkowns (thanks Mr. Bush) into an easy to consider fudge factor. Collect the data, know the knowns and the knowables and then add the fudge factor. If you still don't like the idea of using the fudge factor without some sort of data backing it, go through old projects you ran and apply the fudge factor to the data you had when you started the project. If the numbers come out close to what actually happened then the fudge factor is a good predictor. Finally, it's true that 1.5 and .75 are just guesses but they are constant guesses which makes them better than random guesses because they will deliver consistency in an area where there was little consistency before, i.e. guesstimating, which is half of project planning anyway.
The fudge factor is to multiply your expenses by 1.5 and multiply your resources by .75. If I had done this before moving to DC then I would have seen that my expenses were somewhere around 4.3k monthly and my income would have been more around 3.8k, which, it turns out, is almost dead on for my life in D.C.
Case study: becoming a millionaire in one year using the fudge factor. You need to make 1.5M to be a millionaire, because 1M*1.5=1.5M. And you have nine months to do it, because 1yr*.75=9mo. Now that you know your actual costs and the actual time you have to do it in, the rest of the planning phase is just number crunching and a little bit of reading.
1.5M/9mo means about .16666M per month needs to be netted. If you sell a product with a $6 profit (think $40 product) then you have to sell about 27k products each month. $.60 profit and you have to sell 277k products, and on and on and on. NOW! You know your profit margin and you know the width of your supply chain. Find a supply chain that can support 27k products moving through it per month: Off the top of my head, Walmart, Target etc. Find a product that you can move 27k per month at a $6 profit: Off the top of my head, nutritional supplements, shirts etc. Now I know what your saying/thinking... I don't know how to do any of that and I will fuck it up :( Yes, Mr./Ms. Negativity you will fuck some of it up and that's why there is a fudge factor.
Some of you who are reading this will think that is is not scientific and it isn't the way we should be planning projects in this day of high technology and easy data analysis. Well, first off, in science we use constants all the time, Plank's constant, 9.1m/s^2 etc. They are just things that make equations work out better, even though they are not completely accurate for all cases over all time. And if a constant is working to predict real world events then, it may not be pretty, but it is pretty useful -- and scientific. As far as technology and data are concerned, this just lumps all the rounding errors and unknown unkowns (thanks Mr. Bush) into an easy to consider fudge factor. Collect the data, know the knowns and the knowables and then add the fudge factor. If you still don't like the idea of using the fudge factor without some sort of data backing it, go through old projects you ran and apply the fudge factor to the data you had when you started the project. If the numbers come out close to what actually happened then the fudge factor is a good predictor. Finally, it's true that 1.5 and .75 are just guesses but they are constant guesses which makes them better than random guesses because they will deliver consistency in an area where there was little consistency before, i.e. guesstimating, which is half of project planning anyway.
