THREE-POINT ESTIMATION IN PROJECT PLANNING

Introduction

Estimating the duration of activity requires collaboration with the project team to evaluate the information you have about that activity and its resources. Usually, you can start with an approximate estimate and fix it later. We can use the following five tools and techniques to make the most accurate assessment of your task.

Expert Judgment

You will receive special assessments from members of your project team or from industry professionals who are well-known and experienced in the work to be performed. If you do not get opinions from experienced professionals, chances are your reviews are false!

Analogous Estimating

This is a similar assessment when looking at the performance of the same projects completed earlier. How long it took to do similar work earlier? This only works if the activities and project teams are comparable.

Parametric Estimating

This is the process of converting data about your project into a formula, software, spreadsheet, or database. The software or formula you use to estimate the parameters is built into the database with real-time plans from previous projects.

Reserve Analysis

This is when you add extra time to extra risk. This is also known as an uncertain balance time or buffer time. This is not an economical way to plan a project.

In project planning, understanding tools like ScheduleReader can enhance schedule management and improve project outcomes.

Three-Point Estimates

When presenting three numbers as a realistic assessment that is most likely to occur, a belief that indicates a better option is called an optimistic one, and a pessimistic one indicates a worse situation. Finally, we take the average value from the above three values.

In this article, we will talk about Three-Point Estimates.

Three-Point Estimates

PERT (Project Evaluation Review Technology) is the most widely used method for a three-point estimation. This technology was developed in the 1960s and is a way to achieve more accurate project timelines with companies that partner with the US government.

A three-point estimate is a simple but effective method of estimating cost or time for work activities. This method plays an important role in three aspects of project management. The risk associated with the initial assessment should be calculated for the overall project.

To make a PERT estimate, start with three points: pessimistic, most likely, and optimistic estimates. Since the pessimistic and optimistic estimates are higher and lower than the average estimate respectively, the average estimate is multiplied by 4 and added to the optimistic and pessimistic, then you divide everything by 6 and achieve the desired value.

The formula is as follows:

E = (o + 4m + p)/6 (where “E” is the three-point Estimate, “o” is the optimistic estimate, “m” is the most likely estimate, and “p” is the pessimistic estimate)

When talking about three-point estimates and how they interact with project management, you need to look at three different areas as follows.

Likely to be:

When you think about the duration of the chosen event, you know that you have resources. For example, you can estimate how you will produce something based on the associated action plan. Variables that you cannot control must also be a factor. There is no doubt that things are happening that are confusing the flow of ordinary things.

Best possible:

Take a closer look at the best results of the event, and evaluate the best possible situation. These results show what can happen if everything goes well.

Worst possible:

Next, you will see the adverse effects of the event. You want to be pessimistic and go to the point where nothing is right. What is the worst thing that can happen to you if you do everything that can go wrong?

Calculation of Three-Points Estimates

By using the above-mentioned three types of estimates in the Three-Points Estimates, you can get realistic project management results. Given all these three possibilities, it is a formula for taking the average you get.

However, there are more advanced approaches, in this article we have considered the following equation.

E = (o + 4m + p)/6

where:

“E” is a three-point Estimate

“o” is the Optimistic estimate

“m” is the most likely estimate

“p” the Pessimistic estimate

As an example,

A Project Manager estimates that his task durations are as follows:

10 days optimistically

15 days most likely

40 days pessimistically

Finally, the three-point estimate can be calculated as follow:

(10 + 4*15+ 40)/6 = 18.33 days.

Summary

There are many types of estimation tools and techniques used in the world today. The most popular techniques are Expert Judgment, Analogous Estimating, Parametric Estimating, Reserve Analysis, and Three-Point Estimates. The three-point estimates are the most accurate and practical tool for calculating project time or costs. If we do not get the most appropriate values for the duration, then the project is more at risk. Contact Leopard Project Controls today for your Construction Projects Scheduling.