Part 69: Three-Point Estimating

(Project Schedule Management: Estimate Activity Durations)

(Project Cost Management: Estimate Costs)

- Three-Point Estimating is used to estimate duration and cost
- For duration
- Three-Point Estimating improves activity duration estimates by considering estimation uncertainty and risk

- Developed with the Program Evaluation and Review Technique (PERT)

- To use Three-Point Estimating, we calculate three estimates
- MOST LIKELY (
*tM*)- Typical scenario for the activity

- We base this on the duration of the activity, the amount of resources that are likely to be assigned to the activity & their productivity level, dependencies on other participants, and typical interruptions

- OPTIMISTIC (
*tO*)- Best-case scenario for the activity

- PESSIMISTIC (
*tP*)- Worst-case scenario

- MOST LIKELY (

- The three estimates form a distribution, which results in the estimate,
*tE*

- There are several ways to calculate
*tE*, but the most common ways are- TRIANGULAR DISTRIBUTION = simple average

tE = (t0 + tM + tP) / 3

- BETA DISTRIBUTION = taken from PERT, where the
*tM*is given the most weight

tE = (t0 + 4tM + tP) / 6

- TRIANGULAR DISTRIBUTION = simple average

- For costs
- Improves activity cost estimates by considering estimation uncertainty and risk

- Three estimates are used to determine the range for an activity’s costs
- MOST LIKELY (
*cM*) = estimate based on realistic effort for the work and predicted expenses

- OPTIMISTIC (
*cO*) = best-case scenario for the activity

- PESSIMISTIC (
*cP*) = worst-case scenario

- MOST LIKELY (

- The three estimates form a distribution, which results in the estimate,
*cE*

- Most common ways to calculate
*cE*- TRIANGULAR DISTRIBUTION = simple average

cE = (c0 + cM + cP) / 3

- BETA DISTRIBUTION = taken from PERT

cE = (c0 + 4cM + cP) / 6

- TRIANGULAR DISTRIBUTION = simple average