I've written elsewhere in this blog about the value and theory of threepoint estimating (3PE). See "3PE  why I use three estimates where one might do!". The main practical snag with using 3PE in an agile context is the additional overhead of thinking of 3 numbers every time you want to confirm "effort to complete"  ideally something people can quickly update even on a daily basis.
So I'm working on a mechanism which shows the level of uncertainty in an estimate to complete which takes into account the effort completed to date (T) and the three points of the estimate: best case (b), most likely (m) and worst case (w). If you're interested in the intricacies of such things, please read on!
The composite estimate (E) is the estimate is the derived "median" which is used when one number is required (as for example in the "Total" field in the screenshot above). It is derived from best case (b), most likely (m) and worst case (w) as follows based on assumptions about distribution of cases between best and worst:
E = (b + 4m + w) / 6
Various formulae are possible for our level of uncertainty or estimate risk (R). Here's a starting point expressed in terms of just b and w as follows:
R = (w  b) / (w + b  2T) ..................................[1]
This expresses the average "error", (wb)/2, as a proportion of the average time to complete, (w+b2T)/2. However since it ignores the most likely estimate, it doesn't take into account that for example the worst case may be much further away from the most likely than the most likely is from the best case. An alternative formula would therefore be:
R = (w  m) / (m T) ........................................[2]
But this formula ignores the best case completely. One could say the "error" should be defined as whichever is greater out of (wm) or (mb), but actually it's not this aspect that worries me practically. The worst case is always more significant from a forecasting viewpoint, and from an estimating viewpoint it is the one that can be much further in error than the best case, which can never go lower than T and in practice will always be a little bit higher than T (or you can forget about estimating and just finish it!).
So a better approach is to define the "error" in the formula for R relative to the median estimate, E, all three points are then taken into account. It's much more satisfactory.
Following this approach, here's the formula for the uncertainty in the estimates (estimate risk) that I'll be using:
R = (w  E) / (E  T) ........................................[3]
For those interested in the mechanisms within xProcess to use this formula, there'll be a discussion on that project's wiki about how users can set estimate to complete and level of uncertainty rather than worrying about 3pe every time they update time to complete.
Kamis, 26 Maret 2009
In search of a definition of uncertainty in three point estimates
Share this
Recommended
Disqus Comments
Populer

Here's the Trick to Writing Blog Posts People Genuinely Want to Read With a title like that, I think this newsletter higher be a ...

Don't Be a Victim of Irrational Exuberance Driven by way of optimism over a huge tax cut, the Dow surged past 26,000 with the a...

Understanding Cost of Delay (Part 4): WSJF  the "divisor" This article is the fourth in a series of blogs on Cost of Delay (CoD)...

Understanding Cost of Delay (Part 3): Calculating WSJF In part one of this series of blogs on Understanding Cost of Delay and its Use in ...

7 Quick Ways to Make Money Investing $1,000 If you're sitting on at the least $a thousand and it is scratching an itch to your ...

2 Insights Entrepreneurs Can Take From Marty Crane and His Chair John Mahoney, the fantastic actor who performed Martin Crane, th...

The 15 Most Profitable SmallBusiness Industries in 2016 This article originally published March four, 2016. Being talented with num...

A conversation on the kanbandev online forum has triggered this post. The discussion concerns how evolutionary change is applied, particula...

In this series of blogs we have been examining the use of Cost of Delay as a way of understanding ordering work  either from a quantitative...

Understanding Cost of Delay (Part 2): Delay Cost and Urgency Profiles In part one of this series of blogs on Understanding Cost of Delay a...