Most of the businesses, want to adopt a pert formula to become successful. It is actually a three-point estimation technique. This formula is used to predict the final outcome of the project. It’s very beneficial for the project managers as they will become more –informed about the future profitability which comes out from their project.
Now, if you are more eccentric to know the complete pert formula meaning and its importance for your projects. Then you have to stick with us till the end! So, lets directly dive into it!
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What Is a Three-Point Estimate?
Pert formula is a certain of three-point estimating formula which is a estimation technique used to find-out the in future probiltlabity of any project. It is mostly used by the project managers as they should have the realistic estimates of their projects but they always have some limited data which they derived from this evaluation.
|Three-Point Estimating||It is a technique which is used to estimate cost by using an average or weighted average of optimistic, pessimistic, and more likely estimation when there is uncertainty with the individual activity estimates.|
The term “three-point” in three-point estimating stands for the three kinds of estimations summarize in this technique. And they are as follows:
O – O specify an optimistic estimate, which is called as a best-case scenario or best-case estimate This is the final result that you will going to have if everything goes in right direction. And the chances of hurdles should be less.
P – P specify a pessimistic estimate, which is called as a worst-case scenario or worst-case estimate. This is the final result that you will get when everything goes in the wrong direction. And the final results will for surely worse than you might have think of.
M – M specify the most likely estimate. It is drop down in between the optimistic and pessimistic estimates. It is the figure that you will achieve when you determined the in between reality that your in future profitability may go in right way or may be in the wrong one.
The three-point estimate is achieved by using a formula for the middle activity estimation.
In addition, the three-point estimation technique will be helpful for you to figure out the most real estimations.
If you use an estimate generator then your work will be easier as it will give you more accurate estimation for your project.
Pert Formula examples:
WE have shared all the basic concepts with you of pert
-formula, now it’s time to explain it with an example which makes it easier for you to understand.
For instance, you are the one who is running a construction business and your working duration is 12 hours per day. And now you are thinking to enlarge because you have many other contracts too. So, now you have to work for 14 hours per day to manage your all contracts. That is called your optimistic estimate (O).
But if you think off in reality, then you might realize that you cannot work for 14 hours per day. As you may get some emergency or may be some other accidental situation where you cannot work for 14 hours. So, what next to do?
Now, it’s called as a pessimistic estimate (P), a worst-case scenario, and a negative output.
You can forecast that you may have your normal day routine where you can easily work for 12 hours a day.
This is called as the Most likely estimate (M). It specifies that there will be everything will go in the right direction and nothing will go in a negative way.
So, you can use this pert-formula to have an accurate forecast about your project management.
Let’s have a detail look at some of these formulas right below.
Three-Point Estimating Formulas:
Three –point estimating formulas is mostly likely used by project managers to estimate the in future outcome of their projects.
There are many kinds of three-point formulas, but the most commonly used are:
- Triangular distribution and
- Beta distribution (PERT)
The triangular distribution is the easiest one to figure-out the average outcome. It’s simply the mean value of the components of your three-point estimate.
And here’s how it’d appear when we add-up our fictional data:
E = (14 + 10 + 12) ÷ 3
E = 12
Your supreme time range to complete all your contracts, will be based on triangular distribution formula, which is 12 hours.
Beta Distribution (PERT):
The Beta distribution or Project Evaluation & PERT is a difficult form of three-point estimate calculation.
It is obtained by applying a weighted average of the Optimistic, Pessimistic, and Most Likely estimates.
In the PERT beta distribution, the three estimates never have equal weights.
The Most Likely point is actually multiplied by four times its actual value, and the whole sum of the three points is eventually divided by six.
And here’s how it’d appear when you add-up your fictional data:
E = (14 + 4(12) + 10)/6
E = 12
Program Evaluation Review Technique (PERT):
Program Evaluation Review Technique (PERT) is a project management planning drive that is used to figure-out the amount of time which you needed to complete your project. PERT charts can be used to plan your whole project management.
How do you calculate PERT chart?
The PERT is a estimation which is based on the formula that involve your optimistic time estimate (O), your most likely time estimate (M) and your pessimistic time estimate (P). The equation for PERT is: E = (O + 4M +P) / 6
Why is PERT divided by 6?
It is adding-up M four different times to the sum, but now you have to cover six terms in the average and that’s why you have to divide by six.
It was a detailed information on PERT formula. If you are a project manager or a business owner you will definitely have to use PERT formula to become successful in your projects certainly. How did you find our content, let us know in the comment box below.