Creating a Three Point Estimate

How confident can a project manager be when it comes to estimating? If the project work has been done before in past projects, then the level of confidence in the duration estimate is probably high. But if the work has never been done before, there are lots of unknowns—and with that comes risk. To mitigate the risk, the project manager can use a three-point estimate. A three-point estimate requires that for each activity, optimistic, most likely, and pessimistic estimates be created. Based on these three estimates, an average can be created to predict how long the activity should take (see Figure 6-4).

Workers Units Per Hour Duration for 100,000 Effort

Pressmen (two) 5,000 20 hours 40 hours

Bindery experts (two) 4,000 25 hours 50 hours

Totals 45 hours 90 hours

Table 6-1 Decomposed Work with Quantitative Factors

Figure 6-4 MosUkely

Three-point estimates use the formula (optimistic + most likely + pessimistic)/3 to

,. . . , / Estimated predict an activity s duration.

Optimistic Pessimistic

EXAM TIP If you're thinking this sounds familiar to the Program Evaluation and Review Technique (PERT), you're correct. The PMBOK Guide,Third Edition dropped PERT and replaced it with this nomenclature. You should also note that PERT is rarely used in today's project management practices.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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