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%

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