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PMP Formulae

Earned Value Management


Acronym
PV

Term
Planned Value

Acronym
BAC

Term
Budget At Completion

EV

Earned Value

EAC

Estimate At Completion

AC
CV
SV
CPI

Actual Cost
Cost Variance
Scheduled Variance
Cost Performance Index

ETC
VAC
TCPI
SPI

Estimate To Complete
Variance At Completion
To Complete Performance Index
Schedule Performance Index

Acronym

Formula

Description
+ve implies Earned value > Actual cost, project is
under budget
-ve implies EV<AC ,project is over budget
+ve implies Earned value > Planned Value, project
is ahead of schedule
-ve implies EV<PV ,project is behind the schedule
Greater than 1 implies that project is under
budget
Greater than 1 implies that project is ahead of
schedule
Assuming future cost variance are expected to be
atypical. Here cum means cumulative
Assuming future cost variance will behave like
past i.e. Typical

CV

EV - AC

SV

EV - PV

CPI

EV / AC

SPI

EV / PV

ETC

BAC cum EV

ETC

(BAC cum EV) /cum CPI

EAC

AC + Bottom up ETC

EAC

AC + (BAC-EV)/ (CPI *SPI)

EAC

AC + (BAC-EV)

EAC

BAC/CPI

VAC

BAC-EAC

TCPI

(BAC - EV) / (BAC AC)

BAC or Budget At Completion is valid

TCPI

(BAC - EV) / (EAC AC)

BAC or Budget At Completion is no longer valid

Basic Formula (Bottom up ETC is summation of


costs of the remaining work )
When cost performance is negative and schedule
date must be met
In case of previous Calculations not Valid
(atypical)
Assuming future performance will behave like
past i.e. Typical
How much over or under budget the project
would be at the time of completion

PMP Formulae
Schedule Network Diagram
Acronym
Total Float or
Slack
Total Float or
Slack
Float

Formula
LS ES - Forward Pass
LF- EF - Backward Pass
0 or negative

Description
LS: Late Start
ES: Early Start
LF: Late Finish
EF: Early Finish
On Critical Path

Project Selection Methods


Acronym

Formula

PV

FV / (1+r)^n

FV

= PV * (1+r)^n

NPV
NPV
ROI
Payback Period
.
IRR
BCR
CBR
Opportunity
Cost
Expected Value

Select biggest number.


Sum(PV) - investments
Select biggest number.

Description
PV = Present Value ; r = interest rate
FV = Future value ; n= number of years
PV = Present Value ; r = interest rate
FV = Future value ; n= number of years
Net Present Value
NPV= Total Inflow Total Outflow
Return On Investment

Add up the projected cash inflow


minus expenses until you reach
the initial investment.
Select biggest number.
Benefit / Cost
Cost / Benefit
The value of the project not
chosen.
Probability % x Consequences

Internal Rate of Return


Benefit Cost Ratio
Cost Benefit Ratio
If Project A is chosen and B is not chosen then
the cost of Project B is the Opportunity Cost

PMP Formulae
Communications
Acronym
Communication
Channels

Formula
n * (n-1) / 2

Description
N is the total number of team members

Risk and Probability


Acronym
EMV
RPN

Formula
Probability * Impact
Probability * Impact * Time
Frame

Description
Expected Monetary Value
Risk Priority Number

Procurement
Acronym
PTA
Target price

Formula
[(Ceiling Price - Target Price) /
Buyer's Share Ratio] + Target Cost

CPIF

CPPC

Contract=Cost plus percent of cost


as fee

CPAF

Point of Total Assumption

Target cost + Target fee


Contract=Cost plus fee of fixed
amount.
Contract=Cost plus + incentive
percent + Sharing ratio.

CPFF

Description

Contract=Cost plus an award fee


(some amount) for each delivery
completed at least x days early.

Cost Plus Fixed Fee


Cost Plus Incentive Fee

Cost Plus Percentage of Cost

Cost Plus Award Fee

PERT or Program Evaluation and Review Technique


Acronym
EAD

Formula
[Pessimistic + (4 * Most
Likely) + Optimistic] /6

Description
Expected Activity Duration in case of Beta
Distribution

PMP Formulae
EAD
PERT
Activity Variance
Variance all
activities
Range of Activity

[Pessimistic + Most Likely +


Optimistic] /3
(Pessimistic - Optimistic) / 6
[(P-O) / 6]^2
Sum[(P- O) / 6]^2
EAD +-

Expected Activity Duration in case of Triangular


Distribution
PERT = Standard Deviation
P= Pessimistic O=Optimistic
P= Pessimistic O=Optimistic
EAD = Expected Activity Duration

Classes of Estimates
Estimate
Order of
Magnitude
Preliminary
Budget estimate
Definitive
estimate

Range
-25% to +75%

Description
Also known as ROM or Rough Order of
Magnitude. Done in Early stages of Planning

-15% to + 50%
-10% to +25%
-5% to +10%

Done in Later stages of Planning

Depreciation
Estimate
Depreciation
Expense
Depreciation Rate
Depreciation Rate
Depreciation
Expense
Book Value
Sum of digits

Depreciation Rate

Range
Asset Cost / Useful Life
100% / Useful Life
2 * (100% / Useful Life)
Depreciation Rate * Book
Value at Beginning of Year
Book Value at beginning of
year - Depreciation Expense
Useful Life + (Useful Life - 1)
+ + (Useful Life - n)
fraction of years left and
sum of the digits (i.e.
4/15th)

Description
Straight-line Depreciation
Straight-line Depreciation
Double Declining Balance Method
Double Declining Balance Method
Double Declining Balance Method
Sum-of-Years' Digits Method

Sum-of-Years' Digits Method