A three-point estimate allows you to take into account the risks in your forecasts and provide three unique estimates:  Optimistic estimate: This is the value obtained by believing everything will go smoothly and without problems. This estimate represents the best-case situation in which everything goes perfectly.  Pessimistic estimate: This figure shows the outcomes you can expect if negative situations arise over the course of your project. This estimate might be thought of as the worst-case scenario in which everything goes wrong.  Realistic estimate: This third estimate is regarded as the most probable. It represents a compromise between the optimistic and pessimistic estimates—a medium between the two extremes.  One of the primary advantages of three-point estimating is that it takes into account project risk. Additionally, team members may be more involved because the project manager listened to their suggestions.  The majority of initiatives fail due to inaccurate estimations. Although many project managers see project estimating as one of their most difficult duties, a three-point estimation may make your work easier and more precise. In addition, your estimate will be more reasonable because this technique considers three alternative possibilities.  When adopting the three-point estimating approach for your project, all project team members should write down their optimistic, realistic, and pessimistic estimations for the work that needs to be done and the time it will take to complete it. Then, using the following formula, you can compute a weighted average of the three points:  R is a realistic estimate.  The optimistic estimate is O.  (O+4R+P)/[6] is the pessimistic estimate.  A staple in IT PM interview questions, be prepared to answer this one.