Enrico Fermi, the famous nuclear physicist was well known
for his estimation techniques. Fermi computed the yield of the Trinity Nuclear
Test based on how far strips of paper moved as the shock hit the base camp. So
you may wonder what has it got to do with most of the souls who don’t split atoms
for earning their bread & butter. It is important because even in the daily
routine we would need know the Ball-Park estimate of what we are going to do, be
it Finance, project planning or Time Management. This would help in Negotiating,
Influencing & substantiating with data.
Following are the situations that come to my mind where the
ball-park estimate would be excellent to possess:
Finance:
How much savings I need as savings
during retirement?
How much should I save per month to
reach the Threshold savings for retirement in 10 years?
How much do I need to spend per
month to reach the Threshold savings for retirement in 10 years?
House Purchase:
What would be the cost of an 1000
sq.ft apartment at this location in my town today?
What would be the cost of an 1000
sq.ft apartment at this location in my town an year later?
What would be my Monthly Installment
for this Bank loan?
Project Planning:
How many people would be needed for
this project to be completed in 6 months?
Time Management
How much time do I need to spend to
pursue my hobby each day
Physical Exercise:
How much calories should I burn
each day to reduce my weight by 10kg over an year?
There is no single formula to compute the ball-park
estimate. It is more of a skill that one should acquire by being familiar with
the problem that is being dealt with. The Ball-park figure is an estimate which
means it is not THE accurate answer. Nevertheless ,the better you are at it,
better the results.