Question

You are in the process of making a cost estimate for a large prestigious project. You decide to use the Three Point Estimation technique with Triangular Distribution. Based on your analysis, you are confident that the project will be completed with a total cost of $108,000. You also estimate that a best-case estimate would be $90000, while a worst-case scenario would result in the costs shooting up to $138000. What would the Three point Cost estimate be?

Answer 1

Based on the Three Point Estimation technique with Triangular Distribution, we can calculate the Three Point Cost estimate using the following formula: Three Point Cost estimate = (Best-case estimate + 4 * Most Likely estimate + Worst-case estimate) / 6 In this case, the best-case estimate is $90,000, the most likely estimate is $108,000, and the worst-case estimate is $138,000. Let's substitute these values into the formula: Three Point Cost estimate = ($90,000 + 4 * $108,000 + $138,000) / 6 Simplifying the equation: Three Point Cost estimate = ($90,000 + $432,000 + $138,000) / 6 Adding the numbers: Three Point Cost estimate = $660,000 / 6 Dividing: Three Point Cost estimate = $110,000 Therefore, the Three Point Cost estimate for the project is $110,000. This estimate takes into account the best-case scenario, the most likely scenario, and the worst-case scenario, providing a range that considers the uncertainties involved in the project.

Step-by-step explanation: