3 Point Estimate with 3 people
The Program Evaluation and Review Technique (PERT) formula or 3 point estimating is a simple and useful tool for project managers, and those who are planning to take their PMP Exam should have it memorized.
There is much more to PERT as a project scheduling and planning technique than this formula, but here we’ll focus just on the formula. The PERT formula is mentioned in the 5th edition PMBOK® as a tool and technique of three processes—Estimate Activity Durations, Estimate Costs and Perform Quality Assurance. The formula provides a weighted estimates. The formula doesn’t care if the numbers you use represent time or money—so that’s why it’s in Time, Cost and Quality knowledge areas.
To use this formula, we need three estimates—Optimistic (best-case scenario), Most Likely (realistic), and Pessimistic (worst-case scenario). We then find the average, but we first weight the Most Likely estimate by 4. The formula is (O + (4*ML) + P) / 6. We must divide by six because we in effect have six different estimates (although four of these estimates are the same number). We are averaging (O + ML + ML + ML + ML + P) / 6.
Here’s an example. The Estemitte family is driving home. They guess they are most likely 10 minutes from home, so that is their Most Likely estimate. If all the lights turn green, they guess it may take just 7 minutes to get home, so that is their Optimistic estimate. If it starts raining hard, they guess it may take them 12 minutes to get home, so that is their Pessimistic estimate. We simply put these numbers into the formula: (7 + 10 + 10 + 10 + 10 + 12) / 6 = 9.83 minutes.
This formula is most useful in estimating time or cost of activities for projects that are especially unique, such as in research and development where there are many unknowns. For projects that are similar to previous projects and there is good historical data and expert experience, the formula is less useful.
The 5th Edition PMBOK reinforces the concept of triangular and beta distributions. PERT as it’s classically thought of, and represented above, follows a beta distribution or E = (O + 4ML + P)/6. When referenced as 3 point the distribution is triangular and formula E = (O + ML + P) / 3.
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Posted on October 19, 2013 by Dave Kohrell
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