3 Point Estimates

For each component, come up with a Optimistic (O), Most Likely (M), and Pessimistic (P) estimate of time/effort. Average those times together to get a final estimate. You can use a simple average, or a weighted average, granting more weight to one of the scores.

• Triangular distribution (Simple Average): $(O + M + P) / 3$
• 3 Point Estimate (Weighted Average): $(O + 4M +P) / 6$ - most common, but you can also play with applying weights to the pessimistic score as well, ex: $(O + 4M + 2P) / 8$.

Confidence Intervals

Calculate the Mean and STDDEV for each component using the 3 points estimates. Decide on your needed confidence level referencing the z-value from the table below and multiplying it by your STDDEV. Add that value to the Mean for an average based on your desired confidence level.

$$MEAN = \frac{(O + 4M + P)}{6}$$ $$SD = \frac{(P − O)}{6}$$ $$CONF = MEAN + ( Z * SD)$$ $$90\% = MEAN + ( 1.645 * SD)$$

Critical Path Evaluation

Program Evaluation and Review Technique (PERT)

PERT was developed primarily to simplify the planning and scheduling of large and complex projects. It was developed for the U.S. Navy Special Projects Office in 1957 to support the U.S. Navy’s Polaris nuclear submarine project

A framework for visualizing the interdependencies between tasks and determining the critical path through the project.

• is used to estimate project duration or cost.
• is a “weighted” average estimate technique.
• is best used for planning to ensure accurate scope.
• formula is an approximation of the Beta Distribution equation.
• is determined using three points: Optimistic (O), Most Likely (M), and Pessimistic (P).
• combines probability theory and statistics to derive a formula for the average activity from the three-point estimates.
• estimate formula is: (O + 4M +P) / 6

Links

• How Statistical PERT gives programmers confident estimates: pluralsight.)
• What is the probability that a project will finish early or late (PERT)
• Excerpts from “Software Estimation: Demystifying the Black Art”
• Waltzing With Bears: Managing Risk on Software Projects - I want to read this
• https://eight2late.wordpress.com/2009/09/11/an-introduction-to-monte-carlo-simulation-of-project-tasks/