Anatomy of Best Estimate

Abstract

Every engineering computation is attended by some degree of uncertainty due to factors not taken into account and limitations of data. As a result, computed values differ from true values in nature, and the size and frequency of these differences determine if any particular estimate is a best estimate. A best estimate of any variable may be defined as one that produces an unbiased least‐squares estimate in the objective variable, defined as the variable that is critical in application. It is not necessarily a least‐squares estimate of that particular working variable. In project design, there is always some probability of overdesign and some probability of underdesign (due to uncertainties), and the consequences can be vastly different. If the objective variable is net expected cost where underdesign and overdesign are each appropriately penalized, minimizing net expected cost will automatically provide an appropriate factor of safety and consequently a best design.