Formulae Notes
Note that back in the days, you would have to know the formulas by heart. One would get many questions in the exam, which would require one to be good with numbers. However now a days in the newer version of PMP, the focus is shifted from calculations to understanding what the formula implies. you might see some questions like “what does it mean if the CPI is Positive and SPI is negative?”.
So don’t focus much on remembering all the formulas, rater focus on what the formula means for the project performance.
| Budget at Completion: Assigned project budget | BAC = total project budget |
| Earned Value: Value earned in the work completed | EV = BAC x % complete |
| Planned Value: Assigned value of the work to be completed as of the status date | PV = Budgeted value of the work to be completed |
| Schedule Variance: 0 = on schedule Negative = behind schedule Positive = ahead of schedule | SV = EV – PV |
| Schedule Performance Index: 1 = on schedule < 1 = behind schedule 1 = ahead of schedule | SPI = EV / PV |
| Actual Cost: Actual cost of the work completed as of the status date | AC = what has been spent |
| Cost Variance: 0 = on budget Negative = over budget Positive = under budget | CV = EV – AC |
| Cost Performance Index: 1 = on budget < 1 = over budget 1 = under budget | CPI = EV / AC |
| To-Complete Performance Index: Efficiency ratio comparing work remaining (BAC-EV) to money remaining. Money remaining may be based on the budget (BAC) or the forecast (EAC). IF TCPI is >1 then its bad reflecting more work remaining than money available. | TCPI = (BAC-EV) / (BAC-AC) TCPI = (BAC-EV) / (EAC-AC) |
| Estimate at Completion: A forecast of the estimated total project spend at completion | EAC = AC + ETC (bottom-up) EAC = AC + BAC – EV EAC = BAC / CPI EAC = AC + [(BAC – EV) / (CPI x SPI)] |
| Estimate to Complete: A forecast of the estimated cost remaining to complete the project | ETC = new estimate ETC = EAC – AC |
| Variance at Completion: The difference between the budget and the forecast | VAC = BAC – EAC |
| Communication Channels: The number of communication channels or paths on your project | n (n – 1) / 2 |
| Lead: Acceleration of a successor activity | Activity Duration – Lead |
| Lag: Delay of a successor activity | Activity Duration + Lag |
| Three point Estimation triangular: Used for Duration and cost estimation | (Optimistic + Most Likely + Pessimistic ) / 3 |
| Three point Estimation Beta/PERT: Used for Duration and cost estimation | (Optimistic + (4 X Most Likely) + Pessimistic) / 6 |