you’re a professional at a large organization, you should do better than this rough-and-ready approach. You need to get serious about gathering enough data to allow you to statistically analyze the distribution and determine if it’s normal or fat-tailed. If it’s normal or near normal, do a reference-class forecast using the mean. This would still give you an approximately 50 percent risk of a small cost overrun. If you want to reduce this risk further, add a 10 to 15 percent contingency (reserve), and you’re done.[24]
