Saturday, May 10, 2008

My Notes on PMP (Formulas)

Following are the Formulas I consolidated for PMP preparation

Earned Value Analysis
PV (Planned Value) = BCWS (Budgeted Cost of Work Schedule)
EV (Earned Value) = BCWP (Budgeted Cost of Work Performed)
AC (Actual Cost) = ACWP (Actual Cost of Work Performed)

CV = EV – AC
SV = EV – PV
CPI = EV / AC
SPI = EV / PV

ETC = BAC – EV [Future Variances are Atypical or Not Consistent or Di similar]
ETC = (BAC – EV) / CPI [Future Variances are Typical or Consistent or similar]

EAC = BAC / CPI [simplest formula: typical or no variances]
EAC = AC + ETC [Initial Estimates are flawed]
EAC = AC + BAC – EV [Future variances are Atypical or Not Consistent or Di similar]
EAC = AC + BAC – EV / CPI [Future Variances are Typical or Consistent or similar]

VAC = BAC – EAC

% COMPLETE = EV / BAC x 100
% SPENT = AC / BAC x 100

CV% = CV / EV x 100
SV% = SV / PV x 100

Float or Slack
LS - ES and LF – EF

MEAN -> Average
MODE -> The “most found” number
RANGE -> Largest - Smallest Measure.
MEDIUM -> No in the middle or avg. of 2 middle Nos

PERT = O + 4ML + P / 6
STD. DEV. OF TASK = P – O / 6
TASK VAR. = [(P - O)/6 ] squared = Std. Dev ^ 2
CP STD. DEV. = √ σ² + σ² + σ²

SIGMA
1 = 68.26

2 = 95.46
3 = 99.73
6 = 99.99

Channels of Communication (N x (N – 1)) / 2

Project Selection
PV = F V / (1+r)ⁿ (or) FV = PV x (1+r)ⁿ

Cash Flow = Cash Inflow – Cash Outflow
Discounted Cash Flow = CF x Discount Factor
ARR = S Cash Flow / No. of Years
ROI = (ARR / Investment) * 100 % Bigger is better
BCR = Benefits / Cost

Benefit Cost Ratio (BCR) Bigger is better
((BCR or Benefit / Cost)
Revenue or Payback VS. cost) Or PV or Revenue / PV of Cost

Net Present Value (NPV) = Net Present Value Bigger is better

Internal Rate of Return (IRR) Bigger is better

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

Exp. Value = Probability % x Consequence $

Class of Estimates
Definitive +5%
Capital Cost +10-15%
Appropriation +15-25%
Feasibility +25-35%
Order of Magnitude > +35% (-50 - 75%)

Contract Incentives
Savings = Target Cost – Actual Cost
Bonus = Savings x Percentage
Contract Cost = Bonus + Fees
Total Cost = Actual Cost + Contract Cost

Expected Monetary Value Probability * Impact

Point of Total Assumption (PTA) ((Ceiling Price - Target Price) / buyer's Share Ratio)
+
Target Cost


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 )

Cost of Quality (CoQ) =
( ( Review Efforts + Test Efforts + Training Efforts + Rework Efforts + Efforts of Prevention) / Total efforts) x 100 %