Formulas / Math for PMP

Submitted by admin on Mon, 09/10/2007 - 20:26


If you think a formula is missing here but required in PMP exam. Post a comment and we will add to this table.

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

9. Est. At Completion (EAC)

BAC / CPI,

AC + ETC -- Initial Estimates are flawed

AC + BAC - EV -- Future variance are Atypical

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

10. Est. To Complete

Percentage complete

EAC - AC

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 or payback VS. cost)

Or PV or Revenue / PV of Cost

17. Payback Period

Less is better

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 σ
  • 1σ = 68.27%
  • 2σ = 95.45%
  • 3σ = 99.73%
  • 6σ = 99.99985%
Return on Sales ( ROS )
 

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
Return on Investment ( ROI )

NEBT / Total Investment OR

NEAT / Total Investment
Working Capital

Current Assets - Current Liabilities
Discounted Cash Flow

Cash Flow X Discount Factor
Contract related formulas

Savings = Target Cost – Actual Cost

Bonus = Savings x Percentage

Contract Cost = Bonus + Fees

Total Cost = Actual Cost + Contract Cost

Critical Path formulas 

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

 

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)

 

Comments

slangley (not verified)

Mon, 03/31/2008 - 02:04

As written the formula only works for 1 year.

 The proper formula should be:

 PV=  FV / ((1 + r)^term)  

admin's picture

admin

Mon, 03/31/2008 - 03:37

Correction made. Thanks a lot for reporting the error

 

 

ram6s9 (not verified)

Fri, 06/06/2008 - 21:28

For the sake of completeness, I guess it would be better to include the Six Sigma value too.

 6 Sigma = 99.99985

manishsinghal (not verified)

Mon, 08/18/2008 - 07:27

The formulae for Burn Rate is

1/CPI where CPI = Cost performance Index.

barbarapmp (not verified)

Tue, 09/16/2008 - 19:35

 The formula you have listed for PERT is incorret.  The actual formula is:

(P+(4xM)+O)/6

OR to make it less confusing for folks:

(Pessimistic Estimate + (4 x Most Likely Estimate) + Optimistic Estimate) / 6

o3dr0p0ut1o

Thu, 02/17/2011 - 14:48

(P + 4M + O ) / 6

 

is correct if your follow the MDAS rule...

MichelSteve

Fri, 10/21/2011 - 11:38

 I just checked the MDAS rule and after this i got know that it is true.Any how tahnks for recommending.

Franchises

miansahib

Tue, 09/15/2009 - 22:08

Hi Gurus,

May I know some one maintaining these formula's and updating for PMBOK4.

also I want to know How many Formula's are in Total in PMBOK4 and can someone please share if already  got it.

 Regards,

ChandraR

Wed, 01/13/2010 - 13:59

Can you pl. be more specific how this question is related to PMP?

 

Thanks

Chandra 

 

Have2passfirsttry

Fri, 07/08/2011 - 00:59

I learned this in a class I took.I thought I would share.


AC          operand               EV           operand               PV

<---------------                    -------------->

CV=                        _                                             _                                             SV

CPI=                       /                                              /                                              SPI

 

Arranged alphabetically AC, EV, PV, and the sides  Cs before Ss

Begin with EV and move to the right or left to find your sides

CV= EV-AC

SV=EV-PV

CPI=EV/AC

SPI=EV/PV

Then u just have to remember/memorize :

EAC=BAC/CPI

twenty20

Mon, 03/26/2012 - 08:44

This is really helpful ! Thanks for compiling !!


Cheers, Naveen

sspawar

Thu, 08/23/2012 - 15:20

PMBOK 4 IS +/- 50%,

AND IN ABOVE LIST IT IS -50/+100 %, I THINK IT WAS IN PMBOK 3.

ranajee

Tue, 03/12/2013 - 14:01

This is a great summary and thanks for putting it together.

 Is there any excel sheet or printable version of these formulae.

NagwaHelal

Wed, 05/29/2013 - 15:39

Would u please advise. How to solve this question (in details please)

You have received estimates for one of your project tasks as follows: The Pessimistic estimate is 32 days, the Optimistic estimate is 26 days, and the Most Likely estimate is 22 days. Using this information, calculate the range of Finish Dates for this task with a certainty of 99.999 percent (6 STD).

Choose one answer.


24 days to 26 days

 

18 days to 30 days

 

24 days to 28 days

 

22 days to 26 days

 

atmic

Mon, 06/24/2013 - 22:59

Solution.

Step 1. Determine expected value for estimation: (O+4M+P)/6 = (26+88+32)/6 = 24.33

Step 2. Find Standard Deviation (SD): (P-O)/6 = (32-26)/6 = 1

Step 3. Determine Standard distribution against the required probability.

Since the requirement of probability is 99.999... % (which is 6 Sigma = 99.99985...), then its standard deviation equal:

SD x 6Sigma = 1 x 6 = 6,

which helps to calculate the range from the expected value:

24.33 -/+6 = from 18 days to 30 days (approximately for this case).

qusroo

Fri, 05/31/2013 - 01:06

Hi,

The above sheet is help full,,,,

 

but can u suggest what is the best way to remember the formulas.

 

atmic

Wed, 06/26/2013 - 15:02

I think, the best way for understanding and memorizing the formulas, other rules and principals is using them on your projects; alternatively, mentoring and sharing your thoughts with others.

I also found a very useful community that helps you to understand sophisticated questions and allows sharing your ideas.

https://plus.google.com/110378594959350757709/posts

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ahmed855

Mon, 05/12/2014 - 06:47

Hello,

I am wondering, where did you find these formulas? They don't exist at all in the PMBOK 5th edition!

I am referring to:

13. Net Present Value

14. Present Value PV

15. Internal Rate of Return

16. Benefit Cost Ratio

17. Payback Period

25. Expected Monetary Value

26. Point of Total Assumption (PTA)

Sigma σ

Return on Sales ( ROS ) 
 

Return on Assets( ROA ) 
 

Return on Investment ( ROI )

Working Capital

Discounted Cash Flow

Contract related formulas

How do they come in the exam if never been mentioned in PMBOK !

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