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PMP Formulas

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dthawley's version from 2015-09-22 15:21

Acronyms:

Question Answer
ACActual Cost
BACBudget At Completion
BCRBenefit Cost Ratio
CBRCost Benefit Ratio
CPICost Performance Index
CVCost Variance
DURDuration
EACEstimate At Completion
EFEarly Finish
EMVExpected Monetary Value
ESEarly Start
ETCEstimate To Complete
EVEarned Value
FVFuture Value
IRRInternal Rate of Return
JITJust-In-Time
LFLate Finish
LSLate Start
NPVNet Present Value
PERTProgram Evaluation and Review Technique
PTAPoint of Total Assumption
PVPlanned Value
PVPresent Value
ROIReturn On Investment
SPISchedule Performance Index
SVSchedule Variance
TCPITo Complete Performance Index
VACVariance At Completion
σSigma / Standard Deviation
^"To the power of" (2^3 = 2*2*2=8)
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Earned Value Formulas:

Question Answer
CV =EV - AC
CPI =EV / AC
SV =EV - PV
SPI =EV / PV
EAC (variances will remain) =BAC / CPI
EAC (fundamentally flawed) =AC + Bottom-up ETC
EAC (variance will not happen again) =AC + (BAC - EV)
EAC (over budget + deadline) =AC + [(BAC - EV) / (CPI*SPI)]
ETC =EAC - AC
ETC (flawed) =new estimate
ETC (unearned budget)BAC - EV
ETC (over budget + deadline) =(BAC - EV) / (CPI*SPI)
ETC (variances will remain) =(BAC / CPI) - AC
Percent Complete =EV / BAC * 100
VAC =BAC - EAC
EV =% complete * BAC
TCPI (based on BAC) =(BAC - EV) / (BAC - AC)
TCPI (based on EAC) =(BAC - EV) / (EAC - AC)
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PERT Formulas:

Question Answer
PERT Beta 3-point =(Pessimistic + (4 * Most Likely) + Optimistic) / 6
PERT Triangular 3-point =(Pessimistic + Most Likely + Optimistic) / 3
PERT σ =(Pessimistic - Optimistic) / 6
PERT Activity Variance =((Pessimistic - Optimistic) / 6)^2
PERT Deviation All Activities =√sum((Pessimistic - Optimistic) / 6)^2
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Communications Channels Formula:

Question Answer
Communications Channels =n * (n-1) / 2
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Procurement Formula:

Question Answer
PTA =((Ceiling Price - Target Price) / Buyer's Share Ratio) + Target Cost
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Probability Formula:

Question Answer
EMV =Probability * Impact in currency
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Network Diagram Formulas:

Question Answer
Activity Duration =EF - ES + 1 or LF - LS + 1
Total Float =LS - ES or LF – EF
Free Float =ES of Following - ES of Present - DUR of Present
EF =ES + duration - 1
ES =EF of predecessor + 1
LF =LS of successor - 1
LS =LF - duration + 1
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Project Selection Formulas: (Present and Future Values)

Question Answer
PV =FV / (1+i)^n (i=Interest Rate, n=Number of Years)
FV =PV * (1+r)^n (i=Interest Rate, n=Number of Years)
Payback Period =Add up the projected cash inflow minus expenses until you reach the initial investment.
BCR =Benefit / Cost
CBR =Cost / Benefit
Opportunity Cost =The value of the project not chosen.
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Depreciation

Straight-line Depreciation:
Question Answer
Depreciation Expense =(Asset Cost – Scrap Value) / Useful Life
Depreciation Rate =100% / Useful Life
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Double Declining Balance Method:
Question Answer
Depreciation Rate =2 * (100% / Useful Life)
Depreciation Expense =Depreciation Rate * Book Value at Beginning of Year
Book Value =Book Value at beginning of year - Depreciation Expense
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Sum-of-Years' Digits Method:
Question Answer
Sum of Digits =Useful Life + (Useful Life - 1) + (Useful Life - 2) + etc.
Depreciation rate =Fraction of years left and sum of the digits (i.e. 4/15th)
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Values

Question Answer
1 sigma =68.27% (68.2689492…)
2 sigma =95.45% (95.4499736…)
3 sigma =99.73% (99.7300204…)
6 sigma =99.99% (99.9999998027…)
Control Limits =+/- Three sigma from mean.
Control Specifications =Defined by customer; looser than the control limits.
Rough Order of Magnitude estimate =-25% to +75% (PMBOK®)
Preliminary estimate =-15% to + 50%
Budget estimate =-10% to +25%
Definitive estimate =-5% to +10%
Final estimate =0%
Float on the critical path =0 days
Pareto’s Law =80/20
Time a PM spends communicating =90%
Crashing a project =First crash tasks with the least expensive crash cost. (Only crash costs on the critical path)
JIT inventory =0% (or very close to 0%.)
Minus 100 =(100) or -100
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Mathematical Basics
Question Answer
Average (Mean) =Sum of all members divided by the number of items.
Median =Arrange values from lowest value to highest. Pick the middle one. If there is an even number of values, calculate the mean of the two middle values.
Mode =Find the value in a data set that occurs most often.
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