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Three-Point Estimation

Updated: Jan 10, 2023

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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