Three-point estimation: Difference between revisions

Revision as of 05:23, 10 December 2008

Revision as of 05:27, 10 December 2008

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The Three Point Estimation technique is based on statistical methods, and in particular, the Normal distribution. Three Point Estimation is the preferred estimation technique for IS projects. In Three Point Estimation we produce three figures for every estimate:

'''a = the best case estimate'''<br />

'''m = the most likely estimate<br '''/>

'''b = the worst case estimate'''<br />

These values are used to calculate an E value for the estimate and a Standard Deviation (SD) where:

E = a + (4*m) + b / 6<br />

SD = (b - a)/6

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We then use the E and SD values to convert the project estimates to Confidence Levels as follows:

Confidence Level in E value is approximately 50%<br />

Confidence Level in E value + SD is approximately 70%<br />

Confidence Level in E value + 2 * SD is approximately 95%<br />

Confidence Level in E value + 3 * SD is approximately 99.5%<br />

IS use the 95% Confidence Level, i.e. E Value + 2 *SD, for all project and task estimates