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Converting Optimistic, Most Probable & Pessimistic Time Estimates

Converting Optimistic, Most Probable & Pessimistic Time Estimates
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  • 0:03 The Three Types of Estimates
  • 1:31 Purpose of Three Estimates
  • 2:59 Three Point Estimate…
  • 5:24 Lesson Summary
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Lesson Transcript
Instructor: Stephen Meyer

Stephen has worked as a Project Manager and is PMP certified, as well as certified by the Scrum Alliance.

In this lesson, we'll explore converting optimistic, most probable, and pessimistic time estimates. We'll use these to learn how to improve the accuracy and consistency of estimates in project management.

The Three Types of Estimates

Rita has been a project manager for many years, working for different companies in a number of different industries. The types of projects and team members have varied, but Rita has consistently been accurate in establishing and meeting timelines. This has been due, in part, to her use of 3-point estimation, which uses a weighted average of three different estimates based on three potential outcomes.

Two of the estimates have a similar likelihood of occurring but represent significantly different outcomes. The first is an optimistic estimate, which involves the best-case scenario. In this scenario, the different factors impacting the timeline have all had a positive outcome and the timeline has shortened. The second is a pessimistic estimate, which involves the worst-case scenario. In this scenario, everything that could go wrong has gone wrong and the timeline has lengthened. Neither of these scenarios are the most likely to occur but, given that they could occur, they are included.

The third estimate, known as the most probable estimate, or most likely estimate, is the one given the most weight in the 3-point estimation. This estimate tries to find the middle ground between the best-case and worst-case scenario and assumes that there were both positive and negative outcomes for the factors impacting the timeline. Given that these outcomes cannot be predicted with complete certainty, this estimate is given more weight rather than being used exclusively.

Purpose of Three Estimates

For Rita, the purpose of using three estimates is because it's extremely beneficial, made obvious by her success. However, there are tangible benefits she receives that could be available to anyone who uses 3-point estimates. These include a common understanding through discussion and increased accuracy.

1. Common Understanding

In defining and using three different estimates, there's a common understanding of what is represented. If a single estimate was used, it would be unclear what scenario it represented. Some individuals might be inclined to provide the most probable estimate. Others, who are wary of failing to meet a given estimate, might be inclined to provide a pessimistic estimate. Managers might push for optimistic estimates. Using three different estimates explicitly acknowledges the different outcomes, as well as identifies the factors for each. This allows the team to discuss risks to mitigate and opportunities on which to capitalize.

2. Increased Accuracy

Increased accuracy is also a benefit. Given the large number of different outcomes and the lack of certainty around which outcome will occur, it's important to account for more of them. This reduces the potential gap between the estimate given and the actual amount of time required to complete the task or project. Not only is this beneficial in the short-term but the long-term as well. Planning and forecasting can only be done if estimates are reliable.

3-Point Estimate Calculation

Rita uses each of the optimistic, pessimistic, and most probable estimates in her 3-point estimate calculation. The calculation isn't just an average of the three estimates but rather a weighted average with the weight being given to the most probable. Specifically, the most probable is considered four times as likely as either the optimistic or pessimistic estimate.

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