# 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:**

#### Related:

#### 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