3-point estimation and the PERT formula are two methods that can be used to estimate the completion time of a project. This can be tricky to understand so we have included a number of PERT formula examples below. Firstly…
The 3-point approach uses an average calculation in which values can be expressed as: “estimation = (optimistic + pessimistic + most likely) / 3“.
While the PERT formula makes it more accurate by overweighting the ‘most likely’ value by being expressed as: “estimation = (optimistic + 4 x pessimistic + most likely) / 6.”
- Why Use 3-point estimation and PERT Formula?
- How to calculate the 3-point estimation technique
- PERT formula vs three point Estimation
- PERT Formula Example Video
- PERT Formula FAQs
- What is PERT used for in project management?
- What are the disadvantages of using PERT and Three point estimation?
- Why is it important to use the 3-point estimation technique?
- What are the advantages of the three point estimation technique?
- What is the difference between analogous and parametric estimating?
- Other Project Estimating Techniques
Why Use 3-point estimation and PERT Formula?
Lengthy project timelines and unclear estimation can cause tension and frustration among team members. Nobody likes feeling like they are in the dark about how a project is progressing. Especially when there is potential for something to go wrong.
Using PERT Formula and 3-point estimation will help you get a good understanding of your project timeline and accurate estimations so that everyone is on the same page. This way, you can avoid any unnecessary stress and focus on what’s important – the successful completion of your project.
PERT formula to estimate project completion time
The PERT formula is used to calculate the expected time to complete a project by taking the weighted average of the three-time estimates by considering these 3 elements of time:
O = Optimistic
M = Most likely
P = Pessimistic.
- The optimistic time is the shortest time it could take to complete the project.
- The most likely time is the average time it could take to complete the project.
- The pessimistic time is the longest time it could take to complete the project.
This three elements can be expressed in the next formula:
PERT = (Optimistic + 4 x Most Likely + Pessimistic) / 6
PERT Formula Example
Imagine you are the Project Manager of a software developer team that has recently been assigned to work on an ecommerce website for XYZ Co. As the project manager, you are estimating that it is most likely to develop the website in 9 weeks. Optimistically you estimate that it can be done in 7 weeks and pessimistically with 11 weeks of work.
How many weeks should this project take using the PERT formula?
Let’s break it down:
Most likely: 9 weeks Optimistic: 7 weeks Pessimistic: 11 weeks
The formula is : PERT = (Optimistic + 4 x Most Likely + Pessimistic) / 6
Using the formula and data above, we can expressed the exercise by:
E = (7+4 * 9 + 11) / 6
Therefore, 9 weeks is the estimated amount of time of work verified with the PERT formula.
PERT Formula Calculator
Advantages of using the PERT Formula?
There are many advantages to using the PERT formula. It can help to improve the accuracy of project estimates, identify potential risks and issues early on, and help to better manage resources.
It can also help to improve communication between team members and stakeholders.
This can be extremely helpful in ensuring that a project is completed on time and within budget.
How to calculate the 3-point estimation technique
3-point estimation in project management is a technique used to estimate the value of a project component when there is uncertainty about the component’s value.
Just like the PERT formula this approach values the same considerations of project estimation, that is to say if it is: optimistic, pessimistic and most likely. However, this approach is meant to be way more collaborative, as it required team members to come up with three values:
- Best-case
- worst-case
- most likely case
This value results in a final number which will be the estimated amount of time or cost of the desired outcome for a project.
This technique uses a formula, also known as triangular distribution, based on the historical data and information gathered from the project team. It uses the knowledge of the people who are familiar with the project to generate more accurate results.
This technique uses a formula, also known as triangular distribution, based on the historical data and information gathered from the project team. It uses the knowledge of the people who are familiar with the project to generate more accurate results.
3-Point Estimation Example
Imagine you are in charge of the same software developer team that has recently been assigned to work on an ecommerce website for XYZ Co.
As the project manager, you ask your team about how long they should take to complete the work using the 3-point formula.
E = ( 7 + 9 + 11) / 3
Therefore, 9 weeks is the estimated amount of time of work using the average of the 3-point estimate formula.
Advantages of using the 3-point estimation technique?
The three-point estimation technique has several advantages.
- First, it is a simple and easy-to-understand the technique.
- Second, it is relatively accurate because it can use the team members’ expertise and can provide a good estimate of the value of a project.
- Third, it is flexible and can be adapted to different situations.
PERT formula vs three point Estimation
Project estimation is one of the most difficult tasks in project management. It is also one of the most important, as the estimates provide the basis for project planning and control.
The PERT formula, which is derived from the beta distribution, can be used in conjunction with three point estimation to MORE accurately estimate the duration of a project.
By using the PERT formula, you can account for the variability in the project and come up with a more granular estimate. Three point estimation is a technique that can be used to estimate the value of a random variable. It is based on the idea that there is a normal distribution of possible values for any given event.
However, it is important to remember that the PERT formula and three point estimation are only an estimate and that there is always some uncertainty involved in any estimate.
Differences between 3-point estimation vs PERT formula
| Three Point estimation | PERT Formula |
| It uses Triangular Distribution: E = (o + m + p ) / 3 | It uses Beta Distribution (PERT): E = (o + 4m + p ) / 6 |
| It is a more estimative formula than PERT | It is way more granular than 3-point estimation |
| It is commonly used to analyze cost, duration or even WBS of an entire project As a more collaborative estimation method with team members | It is more common to use along with the Critical Path Method (CPM), helping you to estimate when budget or time is tight. |
PERT Formula Example Video
PERT Formula FAQs
What is PERT used for in project management?
It will help you to identify the critical path and any potential bottlenecks in the project in a more granular estimate.
What are the disadvantages of using PERT and Three point estimation?
It is important to remember that the PERT formula is only an estimate and that there is always some uncertainty involved in any estimate
Why is it important to use the 3-point estimation technique?
Using a three-point estimation technique is important because it helps to reduce the risk of making inaccurate estimates. This technique also helps to improve the
accuracy of project planning and provides a more realistic picture of the project’s schedule and resource needs
What are the advantages of the three point estimation technique?
We can use the expertise of the team and use the technique based on the historical data and information gathered from the project team helping to create a better commitment with the team project.
What is the difference between analogous and parametric estimating?
Analogous estimating is based on the cost of similar projects, while parametric estimating is based on the statistical relationship between variables.
Other Project Estimating Techniques
There are a variety of techniques that can be used to estimate the cost of a project. The right technique should be selected based on the type of project being estimated and the information that is available.
Some of the most common estimation techniques can be:
- Analogous estimating or top-down estimating
- Parametric estimating
- Bottom-up estimating
- Critical Path Method
Each of these techniques has its own strengths and weaknesses, so it is important to select the right technique for the project at hand.
Is the three point estimation parametric?
There is much debate among statisticians about whether the three point estimation method is parametric or not. The three point estimation method is a statistical technique that is used to estimate the values of unknown parameters.
The technique is based on the assumption that the parameters follow a certain probability distribution.
Some statisticians argue that the three point estimation method is parametric, while others argue that it is not. The debate is still ongoing, but there is no clear consensus at this time.
Differences between parametric and analogous technique
Analogous and parametric estimating are two methods used to estimate the cost of a project. Analogous estimating is based on the cost of similar projects, while parametric estimating is based on the statistical relationship between variables.
