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Three-Point Cost Estimating Template
What is Three-Point Cost Estimating Template?
Three-Point Cost Estimating (3PCE) is a cost estimation technique used in project management to estimate the costs of a project activity or task. It involves creating a template with three estimates: Optimistic, Most Likely, and Pessimistic.The 3PCE template helps estimators consider different scenarios and factors that can affect the outcome of the project, providing a range of possible outcomes instead of a single point estimate. This technique is particularly useful for projects with high uncertainty or complexity.
Here's an example of what a 3PCE template might look like:
Three-Point Cost Estimating Template
| Activity/Task | Optimistic Estimate (Best Case) | Most Likely Estimate (Most Probable) | Pessimistic Estimate (Worst Case) |
| — | — | — | — |
| Task A: Development | $10,000 | $15,000 | $20,000 |
| Task B: Testing | $5,000 | $8,000 | $12,000 |
| Task C: Implementation | $3,000 | $5,000 | $7,000 |
In this example, the optimistic estimate represents the best-case scenario, where everything goes smoothly and the task is completed quickly. The most likely estimate represents the average or expected outcome, while the pessimistic estimate represents the worst-case scenario, where unexpected issues arise.
By using this template, project managers can:
- Identify potential risks and uncertainties
- Develop contingency plans for unexpected events
- Create a range of possible outcomes instead of a single point estimate
- Improve communication among team members and stakeholders
The 3PCE template is particularly useful in situations where the outcome is uncertain or influenced by various factors, such as:
- Complex projects with many variables
- Projects with high risk or uncertainty
- Projects involving new technologies or processes
- Projects with tight deadlines or limited resources
By using this template, project managers can make more informed decisions and develop a more realistic understanding of the costs involved in a project activity or task.
Three-Point Cost Estimating Template
Project Information
- Project Name:
- Estimator:
- Date:
Estimating Parameters
- Optimistic (O): The cost estimate based on the best-case scenario.
- Most Likely (M): The cost estimate based on the most probable outcome.
- Pessimistic (P): The cost estimate based on the worst-case scenario.
Cost Estimates
| Item | Description | Optimistic (O) | Most Likely (M) | Pessimistic (P) | Expected Cost (E) |
|---|---|---|---|---|---|
| 1 | Item description | $ | $ | $ | $ |
| 2 | Item description | $ | $ | $ | $ |
Expected Cost Calculation
- Formula: $$ E = \frac{O + 4M + P}{6} $$
- Explanation: The expected cost (E) is calculated by taking the weighted average of the three estimates, where the most likely estimate is given four times the weight of the other two.
Total Cost
- Total Optimistic Cost:
- Total Most Likely Cost:
- Total Pessimistic Cost:
- Total Expected Cost:
Notes
- [Date]: Note or update on cost estimation status or changes.
Approval
- Prepared by:
- Reviewed by:
- Approved by:
- Date:
Export as PDFRelated:
External links:
- Free Project Cost Templates | Smartsheet —smartsheet.com
- Get free templates for project cost estimating, control & analysis in Microsoft Excel, Word, Adobe PDF & Google Sheets formats.
- Three Point Estimating Tool —projecttemplates.guru
- This 3 -point Estimating Tool is used in project planning to make a quantitative guess of project duration. Easy to use, just fill-in the blanks