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# Three-Point Estimation

Updated: Jan 10

Three-point estimation is one way to calculate a realistic estimation using a best-case estimate, worst-case estimate, and most likely-case estimate. There are different ways of using these numbers, depending on how you want to weight the result, but a simple way to use the data is to use the formula.

(Best + Worst + Most likely) / 3 = Expected estimate

As an example, after discussing with your team, you estimate the cost of an event as follows:

• Best–\$3,000

• Worst–\$9,000

• Most likely–\$5,000

(Best + Worst + Most likely) / 3 = Expected estimate

(3,000 + 9,000 + 5,000) / 3 = \$5,700

You might also apply probabilities to estimates. E.g.

• The best case might be assessed as having a probability of 20% (0.2 or P20)

• Worst as 20% likely (P20), and

• Most Likely as being 60% likely (P60).

In such a case, you might calculate the estimated cost of an attack as being:

(\$3,000 * 0.2) + (\$9,000 * 0.2) +(\$5,000 * 0.6) = \$5,400

Note: In the above example, the probabilities add up to 100%