Three Point Estimating

To improve the estimation accuracy instead of considering only one value we can consider three values. This will cover most of the uncertainties. Three Point Estimating considers three values namely: Most likely or realistic value, Pessimistic or the worst value and Optimistic or the Best value. Depending on the distribution we use either of the below formula.

(P+4M+O)/6 which is Beta distribution or (P+M+O)/3 which is Triangular distribution.

Beta distribution is the weighted average which is also called as PERT (Program Evaluation and Review Technique).

Under the PERT one can derive the standard deviation and variance.Standard Deviation for an activity is (P-O)/6 and Variance is Standard deviation Square.

Three Point Estimating technique is used under the processes Estimate Activity Duration and Estimate Costs.