Estimation Techniques
4
Techniques
Analogous, Parametric, Bottom-Up, Three-Point
PERT
Formula
(O + 4M + P) / 6 — weighted three-point estimate
6
Sigma Divisor
Std Dev = (P − O) / 6
PERT is a weighted average, not a simple average
The PERT Distribution
PERT = (O + 4M + P) / 6
(4 + 28 + 12) / 6 = 7.33 days · std dev = (12 − 4) / 6 ≈ 1.33
how to read this
- › The curve shows where the real duration is likely to land. The peak is the Most Likely value.
- › You take three estimates: best case (O), most likely (M), worst case (P).
- › PERT gives M a 4× weight because reality usually clusters near the most likely value, not the extremes.
- › The spread between O and P measures how much uncertainty you have. Wide = risky, narrow = confident.
Four Techniques · Tradeoffs
Analogous
Top-down from similar past projects.
use · early phase, low detail
Parametric
Rate × unit count (cost per sq ft × total sq ft).
use · historical data exists
Three-Point
Weighted PERT using O, M, P.
use · uncertainty is material
Bottom-Up
Estimate every work package and roll up.
use · detail + accuracy needed
Exam Traps
Analogous is fast but least accurate
Top-down estimates from similar past projects. Use when detail is not available. Not the most accurate option.
Bottom-up is most accurate but most expensive
Detailed estimation of every work package then rolled up. The exam rewards knowing the tradeoff.
PERT weights the most likely estimate
PERT is a weighted average where M counts four times. Do not confuse it with a simple average (O+M+P)/3.
Parametric needs statistical relationships
Cost per square foot × total square feet is parametric. It requires historical data and a measurable parameter.
PERT = (O + 4M + P) / 6
Weighted average. The most likely value counts four times. Memorize the formula.
Simple average is NOT PERT
(O + M + P) / 3 is a triangular distribution, not PERT. The exam tries to trick you on this.
Last summer the drive to the coast took 8 hours. This year will be similar. Fast, rough, based on memory.
480 miles at 60 mph = 8 hours. Multiply rate by distance. Statistical, repeatable.
Plan every leg of the route, every gas stop, every meal. Add it all up. Most accurate, most effort.
Best case 6 hours, most likely 8, worst case 14. PERT = (6 + 32 + 14) / 6 = 8.67 hours. Weighted toward reality.
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