# PMP Formulas

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dthawley's
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2015-09-22 15:21

## Acronyms:

Question | Answer |
---|---|

AC | Actual Cost |

BAC | Budget At Completion |

BCR | Benefit Cost Ratio |

CBR | Cost Benefit Ratio |

CPI | Cost Performance Index |

CV | Cost Variance |

DUR | Duration |

EAC | Estimate At Completion |

EF | Early Finish |

EMV | Expected Monetary Value |

ES | Early Start |

ETC | Estimate To Complete |

EV | Earned Value |

FV | Future Value |

IRR | Internal Rate of Return |

JIT | Just-In-Time |

LF | Late Finish |

LS | Late Start |

NPV | Net Present Value |

PERT | Program Evaluation and Review Technique |

PTA | Point of Total Assumption |

PV | Planned Value |

PV | Present Value |

ROI | Return On Investment |

SPI | Schedule Performance Index |

SV | Schedule Variance |

TCPI | To Complete Performance Index |

VAC | Variance At Completion |

σ | Sigma / Standard Deviation |

^ | "To the power of" (2^3 = 2*2*2=8) |

## 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) |

## 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 |

## Procurement Formula:

Question | Answer |
---|---|

PTA = | ((Ceiling Price - Target Price) / Buyer's Share Ratio) + Target Cost |

## 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 |

## 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. |

## Depreciation

Straight-line Depreciation:Question | Answer |
---|---|

Depreciation Expense = | (Asset Cost – Scrap Value) / Useful Life |

Depreciation Rate = | 100% / Useful Life |

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 |

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) |

## 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 |

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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