Three-Point is an estimation technique that allows considering three groups (optimistic, pessimistic and probable) of scenarios or assumptions in estimating task duration. The technique uses a special formula to calculate a weighted average of duration estimates.
The advantage of Three-Point technique is that it allows for more accurate and efficient estimations based on historical analysis and comparison. The limitation is that the technique requires making assumptions that may not fit into the boundary on expectations for an activity.
Here’s a list of actions to use Three-Point technique in appraising task duration:
- Identify a task or activity for estimation
- Decompose this task into the smaller estimable pieces of work (for example, sub-tasks or simple actions)
- Develop three scenarios for each of the sub-tasks:
- The optimistic scenario (a)
- The pessimistic scenario (m)
- The most probable scenario (b)
- Calculate Standard Deviation (SD) for each of the sub-tasks by the formula: SD = (b − a)/6. Standard deviation lets measure variability of the overall estimate
- Calculate Weighted Average (E) for each of the sub-tasks by the formula: E = (a + 4m + b)/6. Weighted average takes into account both the most optimistic and most pessimistic estimates.
- Calculate SD for the task: SD (Task) = √Σ SD (sub-task)
- Calculate E for the task: E (Task) = Σ E (sub-task)
- Determine confidence level of the estimate
- Decide if the obtained level is required for keeping the estimate accurate.