Named for the physicist Enrico Fermi, whose order-of-magnitude estimates were known from the 1940s.
Estimates an unknown quantity within an order of magnitude by breaking it into a chain of factors, guessing each, and multiplying them.
When to reach for it
Decisions that need a defensible number in minutes, such as a market size or capacity estimate, with no data at hand.
How it runs
- State the quantity and its units.
- Break it into three to five factors that multiply.
- Give each factor a low, best, and high guess.
- Multiply the best guesses; bound the result with the lows and highs.
- Rebuild the estimate another way and compare.
- Tighten the most uncertain factor if precision matters.
Where it sits in SOLVE eX
Go to the source
- Order-of-magnitude estimation practice, 1940s