Three Point Estimating

5 minutes 5 Questions

The Three Point Estimating technique is a statistical method which involves the use of multiple estimates to build a cost or schedule model for the project work. The team estimates with three points: Optimistic estimate (O), Most Likely (M), and Pessimistic (P). The project estimate can be calculated with a simple average or weighted average. This approach helps in getting more realistic estimates by reflecting the risk and uncertainty in the estimation process.

Guide to Three-Point Estimating

Importance:
Three-Point Estimating is crucial as it provides a realistic estimate by considering the optimistic, pessimistic, and realistic views rather than a single figure. It gives rich insights into project planning and risk assessment and helps manage stakeholder expectations.

Definition:
Essentially, Three-Point Estimating is a technique that uses three variables to analyze the time or resources required to complete a project task. The three variables are the Most Likely (M), Optimistic (O), and Pessimistic (P).

How it works:
Calculation of estimates in this technique involves two main formulae, Triangular Distribution and Beta Distribution. Triangular Distribution uses the formula: (O + M + P) / 3 and Beta Distribution, typically used in PERT method, uses the formula: (O + 4M + P) / 6.

Answering Exam Questions:
When answering questions on Three Point Estimating, read the question carefully and identify the values given for O, M, and P. Make sure you understand which formula to use for calculations. Always cross-verify your answers.

Exam Tips:
Remember to review Three-Point Estimating equations and principles. Understand the assumptions, contexts, and application of the technique. Understand when to apply Triangular or Beta Distribution. Remember that Three-Point Estimating takes into account uncertainty and risk, providing a more rounded estimate than traditional methods.

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Question 1

You're observing a renovation project where the optimistic time to complete a job is 10 days, with most probable and pessimistic estimates being 15 days and 25 days respectively. What is the PERT estimate?

14 days 16 days 15 days 20 days

Correct Answer: 16 days

To calculate the PERT (Program Evaluation and Review Technique) time estimate, you use the formula (Optimistic Time + 4*(Most Likely Time) + Pessimistic Time) / 6. In this case, the values should be plugged into the formula as (10 days + 4*15 days + 25 days) / 6. That gives the PERT time estimate of 16 days. Other answers are incorrect as they either underestimate or overestimate the PERT time by not using the correct formula and values.

Question 2

You are managing a project in which a task has an optimistic estimate of 12 hours, a most likely estimate of 16 hours, and a pessimistic estimate of 24 hours. Using the Three-Point Estimating technique, what would be the estimate for this task if you prioritize avoiding delays?

24 hours 16 hours 12 hours 20 hours

Correct Answer: 20 hours

The Three-Point Estimating technique is used to calculate a more accurate estimation time, taking into consideration the optimistic, most likely, and pessimistic estimates. It is calculated as follows: (Optimistic + 4(Most Likely) + Pessimistic) / 6. After applying these values into the formula, we have (12 + 4*16 + 24) / 6 = 20 hours. This is why the '20 hours' answer is correct. The '16 hours' answer is incorrect as it only considers the most likely estimate disregarding the formula. The '12 hours' answer is also incorrect as it only considers the optimistic scenario. The '24 hours' answer only considers the pessimistic scenario and therefore is also incorrect.

Question 3

A graphic design task has an optimistic estimate of 30 minutes, a most likely estimate of 45 minutes, and a pessimistic estimate of 75 minutes. The design director expects a precise time schedule. Which Three-Point Estimating value best suits this case?

50 minutes 45 minutes 30 minutes 75 minutes

Correct Answer: 50 minutes

The Three-Point Estimation technique is commonly used in project management and provides a range of possible durations for an activity. The technique uses three estimates to define an approximate range for the task duration: the most optimistic estimate (O), the most likely estimate (M), and the most pessimistic estimate (P). The expected duration (E) is calculated as (O + 4M + P) / 6. So, in this case, the expected duration would be calculated as (30 minutes + 4*45 minutes + 75 minutes) / 6 which equals 50 minutes. This means that the design task will most likely be completed in around 50 minutes, taking into consideration the optimistic, most likely, and pessimistic estimates. The other answers are incorrect because they represent only single points within the range of estimates, rather than the weighted average.

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