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1. PERT

(P + 4M + O )/ 6 Pessimistic, Most Likely,

Optimistic

2. Standard Deviation

(P - O) / 6

3. Variance

[(P - O)/6 ]squared

4. Float or Slack

LS-ES and LF-EF

5. Cost Variance

EV - AC

6. Schedule Variance

EV - PV

7. Cost Perf. Index

EV / AC

8. Sched. Perf. Index

EV / PV

BAC / CPI,
AC + ETC -- Initial Estimates are flawed
9. Est. At Completion (EAC)

AC + BAC - EV -- Future variance are Atypical

AC + (BAC - EV) / CPI -- Future Variance would
be typical

10. Est. To Complete

EAC - AC

Percentage complete

EV/ BAC

11. Var. At Completion

BAC - EAC

12. To Complete Performance

Index TCPI

Values for the TCPI index of less then 1.0 is

good because it indicates the efficiency to
complete is less than planned. How efficient

must the project team be to complete the

remaining work with the remaining money?
( BAC - EV ) / ( BAC - AC )

13. Net Present Value

Bigger is better (NPV)

14. Present Value PV

FV / (1 + r)^n

15. Internal Rate of Return

Bigger is better (IRR)

16. Benefit Cost Ratio

Bigger is better ((BCR or Benefit / Cost) revenue

orpayback VS. cost)
Or PV or Revenue / PV of Cost

Less is better
17. Payback Period
Net Investment / Avg. Annual cash flow.

18. BCWS

PV

19. BCWP

EV

20. ACWP

AC

21. Order of Magnitude Estimate

-25% - +75% (-50 to +100% PMBOK)

22. Budget Estimate

-10% - +25%

23. Definitive Estimate

-5% - +10%

24. Comm. Channels

N(N -1)/2

25. Expected Monetary Value

Probability * Impact

26. Point of Total Assumption (PTA)

((Ceiling Price - Target Price)/buyer's Share

Ratio) + Target Cost

Sigma

Return on Sales ( ROS )

1
2
3
6

=
=
=
=

68.27%
95.45%
99.73%
99.99985%

Net Income Before Taxes (NEBT) / Total Sales

OR
Net Income After Taxes ( NEAT ) / Total Sales

Return on Assets( ROA )

NEBT / Total Assets OR

NEAT / Total Assets

NEBT / Total Investment OR

Return on Investment ( ROI )

Working Capital

Discounted Cash Flow

NEAT / Total Investment

Current Assets - Current Liabilities

Cash Flow X Discount Factor

Savings = Target Cost Actual Cost

Bonus = Savings x Percentage
Contract related formulas

Contract Cost = Bonus + Fees

Total Cost = Actual Cost + Contract Cost

Critical Path formulas

Forward Pass: (Add 1 day to Early Start)
Backward Pass: (Minus 1 day to Late Finish)
LS = (LF - Duration + 1)
ES = Early Start; EF = Early Finish;
LS = Late Start; LF = Late Finish

EF = (ES + Duration - 1)

EVA = Net Operating Profit After Tax - Cost of Capital (Revenue - Op. Exp - Taxes) - (Investment
Capital X % Cost of Capital) EVA - Economic Value Add Benefit Measurement - Bigger is better

Source Selection = (Weightage X Price) + (Weightage X Quality)

PMP - Math Formulae & Important Points

1. Cost Variance, CV = (Earned Value - Actual Cost) EV-AC
2. Schedule Variance, SV = (Earned Value - Planned Value) EV - PV
3. Cost Performance Index, CPI = EV/AC
4. Schedule Performance Index, SPI = EV/PV
BAC = Budget at Completion
EAC = Estimate at Completion
5. EAC = AC + Bottom up ETC - When original estimate is fundamentally flawed
6. EAC = BAC/Cumulative CPI - If no variances have occured and same rate of spending will
continue
7. EAC = AC + (BAC - EV) - When variances are atypical / irregular
8. EAC = AC + (BAC - EV) / Cumulative CPI * Cumulative SPI - when variances are regular. Assumes
poor cost performance.
9. To-Complete Performance Index, TCPI = The cost performance to be achieved to complete the
remaining project. It is Work Remaining / Fund Remaining.
BAC - EV / BAC - AC - Based on Original Budget
BAC - EV / EAC - AC - Based on Re-estimated Budget
10. Estimate to Completion, ETC = EAC - AC
11. Variance at Completion, VAC = BAC - EAC
n
12.FV = PV(1+r)
13. Communication Channels = n(n-1)/2
14. Expected Monetary Value, EMV = P*I, Probability* Impact
15. PERT EAD = (O+4M+P)/6
16. PERT Project Duration = Sum of PERT EADs
17. Standard Deviation, = (P-O)/6
2
18. Variance of an Activity = SD
19. Standard Deviation of a Project = Square root of Var1 + Var2 + ...........
20. NPV/IRR/BCR - Bigger is better
21. Mean = Average

22. Median = Center Number / Value or average of center values

23. Mode = The most frequent number
24. Contract Incentive Savings = Target Cost - Actual Cost
25. Bonus = Savings x Percentage
26. Contract Cost = Bonus + Fees
27. Total Cost = Actual Cost + Contract Cost
28. Point of Total Assumption, PTA = (Ceiling Price - Target Price)/Buyer's Share ratio + Target Cost

3. Standard Deviation, Sigma

1 - 68.26

2 - 95.46

3 - 99.73

4 - 99.99
4. Float / Slack = LS - ES / LF - EF
-------------------------------------------------------------------Early Start (ES) and Early Finish (EF) use the forward pass technique.
To determine the Early Start of an activity, factor in all its dependencies and see its earliest start
date.
Consider the following simple diagram (durations are in weeks):

Click to view original size

The Early Start (ES) for Activity B is 4. Why? B comes after A. A starts on week 1 and finishes on
week 3. So the earliest that B can start is week 4. For simplicity, I think of it as: The duration of
preceding activity + 1
The Early Finish (EF) is the earliest calculated time an activity can end. To calculate Early
Finish, (ES for the activity + Activity Duration) - 1. From the diagram above, we can compute the EF of
activity B as [(4 + 3) - 1] = 6. Hence, the EF for Activity B is 6.
Late Start (LS) and Late Finish(LF) use the backward pass technique. You can think of backward
pass as calculating backward to see how much an activity may slide without affecting the finish date.
Late Start (LS) is the latest time an activity may begin without delaying the project duration. The
simplest way one can compute the LS is adding the float to the activity Early Start. Using the simple
diagram above, we know that Activity B is on the critical path, hence has a float of zero. Also, Activity
B's ES = 4. Hence, LS = (0 + 4) or 4. Note that if an activity has a float of zero, ES and LS will be the
same.
Late Finish (LF) latest time an activity may be completedwithout delaying the project duration. One
can compute LF by LF =(Activity's LS + Activity Duration) - 1. So the LF of Activity B = (4 + 3) - 1 = 6.
Note that since activity B has a zero float, EF = LF.
For memory trigger, if the float of the activity is zero, the two starts (ES and LS) and the two finish
(EF and LF) are the same. Hence, If float of activity is zero, ES = LS and EF = LF.
----------------------------------------------------------------5. Late Start, LS = Early Start + Float

6. EF = ES + Duration -1
7. LF = LS + Duration - 1
8. SWOT - SW/ Internal , OT/ external
9. Estimates - Rough Order of Magnitude - -50% to +50%
10. Budget Estimate ----- -10% to +25%
11. Definitive Estimate ----- -5% to +10%
12. If AC is under Target Cost, Total Contract Cost = Maximum Fee + AC
13. If AC > Target Cost, use PTA.