Three-point estimating
“Three-Point Estimating” is a tool/technique for the process “Estimate Activity Durations”.
The accuracy of single-point activity duration estimates may be improved by considering estimation uncertainty and risk. This concept originated with the program evaluation and review technique (PERT). PERT uses three
estimates to define an approximate range for an activity?s duration: – Most likely (tM). This estimate is based on the duration of the activity, given the resources likely to be assigned, their productivity, realistic expectations of availability for the activity, dependencies on other
participants, and interruptions.
– Optimistic (tO). The activity duration based on analysis of the best-case scenario for the activity.
– Pessimistic (tP). The activity duration based on analysis of the worst-case scenario for the activity.
Depending on the assumed distribution of values within the range of the three estimates the expected duration, tE, can be calculated using a formula. Two commonly used formulas are triangular and beta distributions. The
formulas are:
– Triangular Distribution. tE = (tO + tM + tP) / 3 – Beta Distribution (from the traditional PERT technique). tE = (tO + 4tM + tP) / 6 Duration estimates based on three points with an assumed distribution provide an expected duration and clarify the range of uncertainty around the expected duration.
“Three-Point Estimating” is a tool/technique for the process “Estimate costs”.
The accuracy of single-point activity cost estimates may be improved by considering estimation uncertainty and
risk and using three estimates to define an approximate range for an activity?s cost: – Most likely (cM). The cost of the activity, based on realistic effort assessment for the required work and
any predicted expenses.
– Optimistic (cO). The activity cost based on analysis of the best-case scenario for the activity.
– Pessimistic (cP). The activity cost based on analysis of the worst-case scenario for the activity.
Depending on the assumed distribution of values within the range of the three estimates the expected cost, cE, can be calculated using a formula. Two commonly used formulas are triangular and beta distributions. The formulas
are:
– Triangular Distribution. cE = (cO + cM + cP) / 3 – Beta Distribution (from a traditional PERT analysis). cE = (cO + 4cM + cP) / 6 Cost estimates based on three points with an assumed distribution provide an expected cost and clarify the range of uncertainty around the expected cost.
This definition was found in the PMBOK V5
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