My old man has a friend who spent his entire life in construction. Let’s call him Tommy. Late in his life, in order to advance in his trade and become a supervisor, Tommy began taking classes at the community college.
One class happened to be about ordering stone for the foundation of a new home. The goal of the exercise was to determine how many stones to order for a house of some specified dimensions. It was a simple enough exercise. Tommy made the calculations and turned in his paper.
When the paper was returned to him, Tommy was surprised. His answer was incorrect. Tommy wondered how he could have gotten this simple problem wrong. He’d spent his life in construction. He’d ordered the stone for hundreds, maybe thousands, of homes over his life.
So Tommy went and asked the faculty member to explain where his calculations were wrong. The faculty member explained to Tommy why his answer was incorrect. Tommy, it seemed, had simply ordered too much stone to build a house based on the dimensions he was given. He was off by 20%. Perhaps it was a simple math error, suggested the faculty member. Tommy would do better in the future, no doubt.
Then Tommy asked the faculty member how much of the order for stone he believed would be damaged on the delivery trucks on the way to the job site. The faculty member, having never really ordered stone or built a house before, confessed that he didn’t know. Then Tommy asked him how much of the stone would be lost to theft by the workers or workers from another site. The faculty member again confessed that he didn’t know.
Tommy, however, did know how much stone would be damaged or stolen. The losses would roughly equal the 20% that Tommy added to the order for stone.