This document discusses different techniques for estimating activity durations in project management, including expert judgement, analogous estimating, parametric estimating, three-point estimates, and reserve analysis. It notes that activity duration estimates should include some indication of possible variance, and that the outputs of duration estimating include updated activity attributes and assumptions in the project schedule.

1. Cert IV Project Management

2. Learn about the Activity Duration
Estimating (Tools and Techniques) in the
Cert IV Project Management qualification.

3. Expert Judgment. Activity durations are often difficult to
estimate because of the number of factors that can
influence them, such as resource levels or resource
productivity. Expert judgment, guided by historical
information, can be used whenever possible.
The individual project team members may also provide
duration estimate information or recommended maximum
activity durations from prior similar projects. If such
expertise is not available, the duration estimates are more
uncertain and risky.

4. Analogous Estimating. Analogous duration estimating
means using the actual duration of a previous, similar
schedule activity as the basis for estimating the duration of
a future schedule activity. It is frequently used to estimate
project duration when there is a limited amount of detailed
information about the project for example, in the early
phases of a project.
Analogous estimating uses historical information and expert
judgment. Analogous duration estimating is most reliable
when the previous activities are similar in fact and not just
in appearance, and the project team members preparing
the estimates have the needed expertise.

5. Parametric Estimating. Estimating the basis for activity
durations can be quantitatively determined by multiplying
the quantity of work to be performed by the productivity
rate. For example, productivity rates can be estimated on a
design project by the number of drawings multiplied by
labour hours per drawing, or a cable installation in meters
of cable times labour hours per meter.
The total resource quantities are multiplied by the labour
hours per work period or the production capability per work
period, and divided by the number of those resources
being applied to determine activity duration in work
periods.

6. Three-Point Estimates. The accuracy of the activity
duration estimate can be improved by considering the
amount of risk in the original estimate. Three-point estimates
are based on determining three types of estimates:
• Most likely. The duration of the schedule activity, given the
resources likely to be assigned, their productivity, realistic
expectations of availability for the schedule activity,
dependencies on other participants, and interruptions.
• Optimistic. The activity duration is based on a best-case
scenario of what is described in the most likely estimate.
• Pessimistic. The activity duration is based on a worst-case
scenario of what is described in the most likely estimate.

7. An activity duration estimate can be constructed by
using an average of the three estimated durations. That
average will often provide a more accurate activity duration
estimate than the single point, most-likely estimate.

8. Reserve Analysis. Project teams can choose to incorporate
additional time referred to as contingency reserves, time
reserves or buffers, into the overall project schedule as
recognition of schedule risk. The contingency reserve can be
a percentage of the estimated activity duration, a fixed
number of work periods, or developed by quantitative
schedule risk analysis.
The contingency reserve can be used completely or partially,
or can later be reduced or eliminated, as more precise
information about the project becomes available. Such
contingency reserve is documented along with other related
data and assumptions.

9. There is a tendency to consume contingencies by default!
Two academic theories that discuss this are:
Parkinson’s Law – Work expands to fill the time available;
Student Syndrome – People will start to fully apply
themselves to a task at the last possible moment before a
deadline.

10. Activity Duration Estimating: Outputs
Activity Duration Estimates. Activity duration estimates
are quantitative assessments of the likely number of work
periods that will be required to complete a schedule activity.
Activity duration estimates include some indication of the
range of possible results. For example:
• 2 weeks ± 2 days to indicate that the schedule activity will
take at least eight days and no more than twelve
(assuming a five-day workweek).
• 15 percent probability of exceeding three weeks to indicate
a high probability-85 percent-that the schedule activity will
take three weeks or less.

11. Activity Attributes (Updates). The activity attributes are
updated to include the durations for each schedule activity,
the assumptions made in developing the activity duration
estimates, and any contingency reserves.
LMIT’s Diploma in Project Management is Now
Endorsed by AIPM – Get Your Diploma of PM and You’ll
Also Receive a Certificate from AIPM.

12. LMIT provides online training courses for
the Cert IV Project Management
BSB41507, the Certificate IV of Project
Management and the Diploma of Project
Management BSB51407 in Brisbane, Sydney,
Melbourne, Perth, Adelaide and Canberra.