6 Common Examples to Understand Estimation Better

Calculating is a bookish act or pure arithmetic activity. Estimation is a more practical thing to do and is likely used often in real life. Unless it is about paying a sum or receiving it (where people want only the exact value), a person tends to find the approximate value or an estimate. Sometimes, estimation helps find if there is something fishy. This mostly happens when the exact value differs conspicuously from the estimated one. Such deviation calls for a thorough investigation. You can find terms like rounding off or approximation also used in place of estimation. However, rounding off differs a bit from approximation or estimation[1].

Here is how these three terms differ.

• Approximation: Mostly used when the mathematical operation, usually division, will not yield the exact quotient. 10/3, 5/6 are some of the fractions that can give only approximate value but not the exact value of the quotient.
• Rounding Off: If the number is say 46, it is rounded off to 50, or if the number is 44 or 43, it is rounded off as 40. So, rounding off involves both going on the higher or lower side of the number to arrive upon an acceptable figure easier to deal with.
• Estimation: It means guessing. Normally, when the sample size is quite large, or the relationship between different parameters involved in a scenario is to be found out, estimation is used. For example, finding how many people from a population of lakhs are unemployed requires estimation. Similarly, when we know that a certain workers’ strength takes ‘n’ number of days to complete a building, the days required to complete another building of proportionate measurements are first estimated to make a project plan.
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Let’s take a look at real-life examples involving Estimation that show how this concept is employed to accomplish various work objectives.

Common examples where Estimation is applied

1. Constructions Project Management and Estimation

All construction projects require a lot of planning, which cannot be done without estimation. The realtor requires preparing an estimation of the building area, the project cost that is likely to incur in the building process, labor required, etc. to get the necessary approval for the project from authorities. With the help of estimation of materials cost, labor cost, budget planning, and so forth, the realtors arrive upon the crucial figures. When they say that project is overshooting the budget or is within range, It is because of the estimated value that helps them define the safe limits of all aspects involved in construction.

2. Property Evaluation

Various legal matters like appropriation of property, for recovery or for distributing among heirs, is a practical example or application of estimation. When any property is put for auction, an estimated figure is found based on the market rates, location’s value, and other factors, and then the lowest bid level is decided. Similarly, the division of property among multiple heirs is done by estimating the assets’ values. All these actions make use of estimation ability to get the idea easy to accept by all parties involved.

3. Research Analysis

Researches of primary nature, where sampling and analysis are important activities, estimation plays a crucial role. By using estimation techniques, the hypothesis is accepted or refuted. Statistical tools like finding mean, mode or median also revolve around the concept of estimation and help arrive upon the approximate values. So, various researches where a lot of data-crunching is involved, estimation is used for ascertaining the correctness of pivotal findings.

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4. Market Analysis

Businesses need to analyze people, competition, market demand and supply, and other factors before making production and marketing-related decisions. All these activities utilize the estimation of values. Common types of estimation involved in market analysis are – trend estimation, pricing estimation, demand estimation, etc. All top entities involved in business management and expansion utilize estimating techniques and bring number-crunching to a conclusive ending, allowing them to make decisions with added awareness.

5. Math Reasoning

It is the estimation that helps a student make math-reasoning related inferences. They employ estimation abilities to find approximate values of distance, time, shape parameters while making guesses about day-to-day activities. For example, when someone asks, ‘How far your school is from your house?’ or ‘How fast that cyclist is racing if he covers 100m in 10 seconds?’, close to actual answers to such questions are given by estimating.

6. Splitting the Bill

Eating out is a favorite activity of one and all. People bonding with each other over a meal can do it much better way when they decide to Go Dutch. It is where estimation comes into the picture and helps friends find an approximate value each has to pool in for paying the bill. Estimating allows them to find the probable value of the food bill and divide it in a justified manner. When they do not want to sound too stringent by using a calculator, estimation abilities provide them respectable support and find the probable share of every person.

How to refine the capability to estimate to apply it better in real life?

Here are some practical tricks you can follow to use estimation and go effortless in doing it.

• Practice is the buzzword for mastering the art of estimation. The more you practice, the more comfortable will you be with numbers. Also, you will find yourself closer to actual values with added accuracy when you have done a lot of mental math, often and repeatedly.
• The second rule to master estimation is to avoid calculators or to count everything literally. Rather than counting, keep the rules of rounding off in mind. Practice to find the rounded off value more often and try to apply it in all situations. It will surely help you become an estimation genius.
• Solve lots of estimation worksheets or play estimation games. There are several tools for learning and practicing available for gaining accuracy in estimating activity. Use them routinely. The best thing about these learning tools is that they are based on daily life situations most of the time. Thus, the ease of applying them in practical settings is enhanced by using learning tools.