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    Formulas To Know For EXAM: Activity & Project Duration Formulas

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    MM
    This document provides formulas for calculating activity durations, float, earned value management metrics, present value, communication channels, expected monetary value, and point of total assumption. Key formulas include using optimistic, most likely, and pessimistic estimates to calculate activity duration via the PERT triangular or beta distributions. Float is calculated as the difference between late and early start/finish dates. Earned value formulas allow calculation of cost and schedule variance, performance indices, estimate at completion, and variance at completion. Present value considers the time value of money. Communication channels increases with the number of stakeholders. Expected monetary value weights probability and impact. Point of total assumption defines cost responsibility in fixed price incentive contracts.

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    Formulas To Know For EXAM: Activity & Project Duration Formulas

    Uploaded by

    MM
    36 views5 pages
    This document provides formulas for calculating activity durations, float, earned value management metrics, present value, communication channels, expected monetary value, and point of total assumption. Key formulas include using optimistic, most likely, and pessimistic estimates to calculate activity duration via the PERT triangular or beta distributions. Float is calculated as the difference between late and early start/finish dates. Earned value formulas allow calculation of cost and schedule variance, performance indices, estimate at completion, and variance at completion. Present value considers the time value of money. Communication channels increases with the number of stakeholders. Expected monetary value weights probability and impact. Point of total assumption defines cost responsibility in fixed price incentive contracts.

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    PMP-Math-Formulas

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    This document provides formulas for calculating activity durations, float, earned value management metrics, present value, communication channels, expected monetary value, and point of total assumption. Key formulas include using optimistic, most likely, and pessimistic estimates to calculate activity duration via the PERT triangular or beta distributions. Float is calculated as the difference between late and early start/finish dates. Earned value formulas allow calculation of cost and schedule variance, performance indices, estimate at completion, and variance at completion. Present value considers the time value of money. Communication channels increases with the number of stakeholders. Expected monetary value weights probability and impact. Point of total assumption defines cost responsibility in fixed price incentive contracts.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    36 views5 pages

    Formulas To Know For EXAM: Activity & Project Duration Formulas

    Uploaded by

    MM
    This document provides formulas for calculating activity durations, float, earned value management metrics, present value, communication channels, expected monetary value, and point of total assumption. Key formulas include using optimistic, most likely, and pessimistic estimates to calculate activity duration via the PERT triangular or beta distributions. Float is calculated as the difference between late and early start/finish dates. Earned value formulas allow calculation of cost and schedule variance, performance indices, estimate at completion, and variance at completion. Present value considers the time value of money. Communication channels increases with the number of stakeholders. Expected monetary value weights probability and impact. Point of total assumption defines cost responsibility in fixed price incentive contracts.

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    16-05-2020 02:37:59

    Formulas to Know for EXAM


    Activity & Project Duration Formulas
    In order to calculate Estimated Activity Duration (EAD) of an activity, Optimistic (O), Most
    Likely (M) and Pessimistic (P) estimates for an activity are determined first.

     PERT Triangular Distribution

    𝑂+𝑀+𝑃
    EAD =
    3

     PERT Beta Distribution

    𝑂 + 4𝑀 + 𝑃
    EAD =
    6

     Standard Deviation (SD) of an Activity

    𝑃−𝑂
    SD =
    6

     Variance of an Activity

    𝑃−𝑂 2
    Variance = ( )
    6

     Range of an Activity Duration

    Range of an Activity Duration = EAD ± 𝑆𝐷

    Float (Slack) Formulas


    Float (Slack) of an activity determines how long an activity can be delayed without affecting
    the project end date. If an activity is on critical path, float (slack) of that activity will be zero.

    In order to calculate Float (Slack) of an activity, Late Start (LS) and Early Start (ES) or Late
    Finish (LF) and Early Finish (EF) values of the activity are determined first.

    Total Float = Late Start (LS) – Early Start (ES)

    Total Float = Late Finish (LF) – Early Finish (EF)

    PMP Exam COMPLETE Training Course Material-Resit Gulec 1


    Not for distribution, sale or reproduction. Cannot be used without permission of the Author.
    Earned Value Management Formulas
    Abbreviations of Earned Value Terms:

     Earned Value = EV
     Planned Value = PV
     Actual Cost = AC
     Cost Variance = CV
     Schedule Variance = SV
     Cost Performance Index = CPI
     Schedule Performance Index = SPI
     Budget at Completion = BAC
     Estimate to Complete = ETC
     Estimate at Completion = EAC
     Variance at Completion = VAC
     To-Complete Performance Index = TCPI

     Cost Variance (CV)


    CV = EV − AC

     Schedule Variance (SV)


    SV = EV − PV

     Cost Performance Index (CPI)

    𝐸𝑉
    CPI =
    𝐴𝐶

     Schedule Performance Index (SPI)

    𝐸𝑉
    SPI =
    𝑃𝑉

     Budget at Completion (BAC)

    BAC is determined during cost management activities, in Determine Budget Process,


    in a project. BAC includes contingency reserves for activities and defines how much
    money will be spent during project in total.

    PMP Exam COMPLETE Training Course Material-Resit Gulec 2


    Not for distribution, sale or reproduction. Cannot be used without permission of the Author.
     Estimate to Complete (ETC)

    ETC can be determined by re-estimation of the remaining works in a project or


    earned value (EV) of the accomplished activities can be subtracted from EAC to find
    ETC value.

    ETC=Re-estimation of Remaining Works


    ETC = EAC − AC

     Estimate at Completion (EAC)

    EAC value can be found by 3 different approaches using EV, SPI and CPI values.

    Approach #1: assumes that all future ETC work will be accomplished at the budgeted
    rate.

    EAC = AC + (BAC − EV)


    Approach #2: assumes that cost performance achieved till now is expected to
    continue in the future.

    BAC
    EAC =
    CPI
    Approach #3: assumes that ETC work will be performed at an efficiency rate that
    considers both the cost and schedule performance indices.

    BAC − EV
    EAC = AC +
    CPI x SPI

     Variance at Completion (VAC)


    VAC = BAC − EAC

    PMP Exam COMPLETE Training Course Material-Resit Gulec 3


    Not for distribution, sale or reproduction. Cannot be used without permission of the Author.
     To-Complete Performance Index (TCPI)

    TCPI can be calculated by two approaches. If there is not a new EAC value, 1st
    approach is used. If there is an EAC value, then 2nd approach is used.

    Approach #1:

    𝐵𝐴𝐶 − EV
    TCPI =
    BAC − AC

    Approach #2:

    𝐵𝐴𝐶 − EV
    TCPI =
    EAC − AC

    Present Value Formula


    There is time value of money and value of a future cash flow is less today than its amount in
    future. This is calculated by Present Value (PV) formula. Abbreviations of terms:

     Present Value = PV
     Future Value = FV
     Interest rate = r
     Number of periods = n

    FV
    PV =
    (1 + r)n

    Number of Communication Channels Formula


    If there are N stakeholders in an environment, following formula will give total number of
    communication channels between stakeholders in this environment.

    N(N − 1)
    Number of Communication Channels =
    2

    PMP Exam COMPLETE Training Course Material-Resit Gulec 4


    Not for distribution, sale or reproduction. Cannot be used without permission of the Author.
    Expected Monetary Value
    Expected Monetary Value (EMV) of an opportunity or threat is calculated by following
    formula:

    EMV = Probability x Impact

    Point of Total Assumption


    Point of Total Assumption (PTA) is applicable only in Fixed Price Incentive Fee (FPIF)
    Contracts. Costs above PTA level are considered to be due to mismanagement. PTA is
    calculated by following formula.

    Ceiling Price − Target Price


    PTA = + 𝑇𝑎𝑟𝑔𝑒𝑡 𝐶𝑜𝑠𝑡
    Buyer ′ s Sharing Ratio

    PMP Exam COMPLETE Training Course Material-Resit Gulec 5


    Not for distribution, sale or reproduction. Cannot be used without permission of the Author.

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