It uses a weighted average (not a simple average) to determine the mean of the three estimated values. The three points O, P, and M are used in the Program Analysis Review Technique (PERT) formula. Program Analysis Review Technique (PERT) Formula The Most Likely estimate captures the highest likelihood of completing the work in the given duration or cost. The name is accurate in the estimate is based on changes, but ones that have been planned for and can be mitigated. The third value in the PERT formula is the Most Likely estimate and is represented as “M.” Most Likely Estimate (M)Įstimate for both favorable and unfavorable conditions, with some risks occurring. The Pessimistic Estimate is the “worst-case” and thus longest duration, or highest cost, to complete the work. It is the opposite of the Optimistic estimate in concept. The “Pessimistic estimate” is used in the PERT formula and is represented as “P.” Pessimistic Estimate (P)Įstimate for all unfavorable conditions with all negative risks occurring and no mitigation of negative risks The Optimistic Estimate is the “best-case” and thus shortest duration, or lowest cost, to complete the work. The “Optimistic estimate” is one value within the PERT formula and is represented as “O.” Optimistic Estimate (O)Įstimate for all favorable conditions with no risks or changes When studying PERT as part of preparing to take the PMP® exam, it is important to know it is one type of three-point estimating, what it can be used to estimate (duration or cost), and when in the project to use it. PERT estimate formula is: (O + 4M +P) / 6.PERT combines probability theory and statistics to derive a formula for the average activity from the three-point estimates.PERT is determined using three points: Optimistic (O), Most Likely (M), and Pessimistic (P).PERT formula is an approximation of the Beta Distribution equation.PERT is best used for planning to ensure accurate scope.PERT is a “weighted” average estimate technique.PERT is used to estimate project duration or cost.As for when in a project to use PERT analysis to determine a schedule or cost estimate, it is best during planning and implementation. Key points about PERT include: Note the PMBOK® Guide definition is not “PERT PMP,” nor “PERT Analysis PMP,” as those are not the formal names for the technique. – Source: pmi.org/pmbok-guide-standards/lexicon See also analogous estimating, bottom-up estimating, parametric estimating, and three-point estimating. The PMBOK® Guide online lexicon provides this definition for PERT: Program Evaluation and Review Technique (PERT)Ī technique used to estimate project duration through a weighted average of optimistic, pessimistic, and most likely activity durations when there is uncertainty with the individual activity estimates. PERT has become the most used and popular method of choice among project managers due to its reliability and accuracy. PERT has been used across the globe, in many industries, and for decades. Understanding PERT for Projects: Three-Point Estimating PMP
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