The answer provided did not directly address nor completely answer the researcher's question. In additions, the web URL to which the answer referenced is a non-existent external site: "http://sceaonline.net/". Should not the source of an official DAU answer be from original source Government resources?
It looks like you were looking at an Ask a Professor Question from 2008. I recommend you take a look at http://www.investorwords.com/19333/rough_order_of_magnitude_ROM.html " Definition
An estimate of costs and time provided in the early stages of a project when its scope and requirements has not been fully defined. An ROM is used to reduce the uncertainty of cost outcomes for both parties when project details have yet to be identified."
You might also want to look at the following site (Project Management Body of Knowledge, PMBOK)
What follows comes from that site and may help you understand the definition of ROM.
"You can be almost certain that one of the questions on the exam is going to test you on your knowledge of the five types of estimates. So in order to prepare for the exam you are going to simply have to learn the following estimate names and the spread (range) of the percentages by heart:
Rough Order of Magnitude estimate = -50% to +50% (PMBOK®)
Preliminary estimate = -15% to + 50%
Budget estimate = -10% to +25%
Definitive estimate = -5% to +10%
Final estimate = 0%
But not only will you have to know the percentages and be able to say what type of estimate you are looking at, you are also going to have to take actual estimate figures and determine what type of estimate we have. For instance you have to be able to say that an estimate that has a range from $75,000 - $175,000 with a target price of $100,000 is an Order of Magnitude estimate.
You also have to realize that an estimate which has a spread of -14% to +40% is still a Preliminary Estimate, even though the numbers don't match exactly. The ranges are approximations and you have to be able to determine into which type of estimate any given spread falls.
Once again, knowing this is simply a question of "practice makes perfect" and the more questions about estimating and the various spreads you answer the more familiar these numbers will be.
The trouble with these numbers is that there is no definite and ultimate authority that defines these. This is because an ROM in your industry may be different than in mine. So each book and each list that you open and look at you will see a difference in the numbers (even my list is slightly different than yours.)
Unfortunately, there is nothing you can do about this. It's simply the nature of the beast. The only course of action you have is to "shrug your shoulders and move on".
For the PMP exam please know the numbers that we publish in the PMP Exam Formula Study Guide (same as above).
Until Next Time,
Cornelius Fichtner, PMP, CSM
President, OSP International LLC"
By looking at these two links you can see a ROM truly is just a rough order of magnitude and it is very rough.
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