Formulas Must

8/12/2019 Formulas Must

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Earned Value Management

EV = BAC * % complete

EV = PV * % complete (any point during project execution)

EV=BCWP (budgeted cost of work performed)

PV=BCWS (budgeted cost of work scheduled)

AC=ACWP (actual cost of work performed)

SV = EV-PV > 0 is good

SPI = EV/PV > 1 is ahead of schedule

CV = EV-AC > 0 is good

CPI = EV/AC > 1 is under budget

PV = SV/(SPI-1)

AC = CV/(CPI-1)

EAC = AC+bottom-up ETC : when initial estimates are flawed

EAC = AC+(BAC-EV) : when ETC is predicted to be done at budgeted rate (ATYPICAL)

EAC = BAC/CPI : when ETC is expected at current CPI (typical)

EAC = AC+(BAC-EV)/(SPI*CPI) : at current SPI, CPI

EAC=BAC-CV ?

EAC = AC/%Complete

ETC = EACAC :assuming work goes as per plan

ETC = BACEV

VAC = BACEAC

%VAC = VAC/BAC * 100

TCPI = (BAC-EV)/(BAC-AC) : accepting BAC value

TCPI = work remaining/funds remaining

TCPI = (BAC-EV)/(EAC-AC) : when BAC is not sufficient and EAC is calculatedTCPI > 1 is bad

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Expected Monitory value: EMV=Impact*Probability

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Communication channels = N*(N-1)/2


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7% of communication message is contained in words

38% in vocal pitch

55% in body language

Albert Mehrabians book Silent Message

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TEAM stagesTuckman (Jensen) Ladder

forming

storming

norming

performing

adjourning

Future value & Present value

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FV = PV (1+r)^N : r=rate of interest, N=number of time periods

PV = FV/(1+r)^N

NPV : higher the better

NPV > 0 investment will add value, accept the project

Internal rate of return, IRR : Bigger the better

Benefit Cost Ration, BCR : Bigger the better

Payback period: Lesser the better : This is nothing but Breakeven period

Payback period=Net investment/Avg annual cash flow

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Probability distribution

PERT: Normal: (O+M*4+P)/6

Triangular: (O+M+P)/3

SD of activity = (P-O)/6

Variance of activity = [SD]squared

-Float/Slack/total slack = LS-ES = LF-EF : =0 for activities on critical path

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Cost Of Quality, COQ = EFTW+COPQ = POC+PONC

Essential first time work

Cost of poor quality


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Price of Conformance

Price of non-conformance

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Depreciation/Straight-line depreciation = Asset cost/Useful life

Double declining balance = 2x((Asset costAccumulated depreciation)/Useful life)

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Rough Order of Magnitude (ROM) -25% to +75%

Budget Estimate -10% to +25%

DefinitiveEstimates -5% to +10%

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Remember, RETURN = Net Income Before Tax (NIBT) *or* Net Income After Tax

(NIAT); & ON means /

Return on Sales, ROS = NI*T/Total Sales

Return on Assets, ROA = NI*T/Total Assets

Retrun on Investment, ROI = NI*T/Total Investment

Working Capital = Current AssetsCurrent Liabilities

Discounted cashflow = Cashflow * Discount factor

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Contract related formulas

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Savings = Target costActual cost

Bonus = Savings*Percentage

Contract cost = Bonus+Fees

Total cost = Actual cost + Contract cost

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Point of total assumption

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

Cost to buy = Initial cost + [#months * (monthly maintenance costs)]lifecycle cost = total cost + maintenance and support cost for lifetime of product

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Normal Distribution

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1 sigma = 68.26%


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2 sigma = 95.46%

3 sigma = 99.73%

6 sigma = 99.999%

1 SD = 1 sigma

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What Five Strategic Considerations may result in authorization of a project?

(MOCkTaiLSMOCTLS)

Market demand

Organizational need

Customer request

Technological advances

Legal requirements

Social need

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EVA = Net Operating Profit After TaxCost of Capital (RevenueOp. ExpTaxes)

(Investment Capital X % Cost of Capital)

EVA: Economic Value Add Benefit MeasurementBigger is better

Source Selection = (Weightage X Price) + (Weightage X Quality)

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Types of powers of PM:

Legitimate

Reward

Expert

Referent

Coersive/Punishment

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Motivational theories

Hertzbergs highgyene-motivationMaslows hierarchy of needs

McGregor Theory X, Y; / Z(assurance of permanent job position)

McClellands Need Theory

Victor Vroom Expectance theory


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Peter Principle=Halo effect

range of variance on a budgetary estimate can be from -10% to +25%.

Paul Hersey/Ken blanchards Situational continuum/leadership

change leadership style based on maturity of subbordinates/team.

S1: Telling; S2: Selling; S3: Participating; S4: Delegating;

system testing vs integration testing

Seven Quality Mgmt and Control tools(NP, MAP IT)

Network diagram

PDPC

Matrix diagram

Affinity diagram

Prioritization Metrics

Interrelationship digraphs

Tree diagram

7 Basic Quality Tools (See See See, Husband and Father Playing Soccer)

Check sheet

Control chart

Cause-and-effect diagram

Histogram

Flow chart

Pareto chart

Scatter diagram

type II errorbeta riskACTIVITY ON ARROW/arrow diagramming method

McKinseys 7Ss - Robert H. Waterman, Jr. and Tom Peters

Hard Elements

Strategy


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Structure

Systems

Soft Elements

Shared Values

Skills

Style

Staff

7 reasons of conflicts on projects

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schedule

project priorities

human resources

technical opinions and performance trade-offs

administrative procedures

persnality conflict

cost and budget

Conflict management style

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withdraw/avoid

compromise

smoothen/accomodate

collaborating

confront/problem solving

force

Collaborating: win/win;

Compromising: win some/lose some; >> lose/lose

Accommodating: lose/win;

Competing: win/lose;

Avoiding: no winners/no losersTest of Normality

Paired Comparison Analysis

opm3

managemet by objective

capability maturity model


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tqm

Merrill and Reid in their employee motivation theory?

personality traits: driver, expressive, amiable, and analytical.

Joseph Juran:applied the Pareto principle to quality issues

Jurans Trilogy: quality planning, quality control, and quality improvement.

W. Edwards Deming

PDCAalong with Shewart

Philips CrosbyDIRFT (4 principles)

The definition of quality is conformance to requirements (requirements meaning both

the product and the customers requirements)

The system of quality is prevention

The performance standard is zero defects (relative to requirements)

The measurement of quality is the price of nonconformance

Vilfredo Federico Damaso Pareto

80-20 principle

Kaoru Ishikawa

root-cause diagram: fishbone

KJ Diagram ()

William Ouchi (jap)

Theory Z, permament job offer

Genichi Taguchi

Design of experiments

F.C. Moore

Delegation means assigning work to the others and giving them authority to do so

Overlapping relationship

Sequential relationship

Multi-phase relationship

Iterative relationshipPredictive/plan-driven

Iterative and Incremental

Adaptive/Agile

NPV is defined as: The difference between the present value of cash inflows and the

present value of cash outflows.


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critical chain methd by Eliyahu M. Goldratt

The critical path method (CPM) is a project modeling technique developed in the late

1950s by Morgan R. Walker (of DuPont) and James E. Kelley

Parkinsons law is the adage which states that work expands so as to fill the time

available for its completion.

Students syndrom work is done at the last moment before deadline

Group decision making criteria (BINAM)

Brainstorming

Idea/mind mapping

Nominal technique

Affinity diagrams

Multi-criteria decision analysis

Failure mode and effect analysisFMEA

QFDquality function deployment (type of Facilitated workshops)

Discrete, Apportioned, Level of EffortEMV effort types

marginal analysis

lifecycle costing

demings 14 points?

ARMA>

zero sum processing

issue log

shannon-weaver model of communication

code of ethics: Respect, Responsibility, Honesty, Fairness >>>> Aspirational and

Mandatory

direct, indirect, fixed, variable costs

Thats about it. It may look a long one, but when you write one for yourself it certainly

doesnt feel long. And moreover you write even tersely on paper. The only thing to keep


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in mind is to practice the brain-dump couple of times daily in the last week leading up to

your actual PMP exam. The more you practice, the easier it is to write on paper in

shortest time, and more confident you will feel during the exam!

So, thats a secret to feel good and do good during the exam!

If you need any help with your PMP preparation do not hesitate to write to me at shiv-at-

pmexamsmartnotes-dot-com

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