Time Management

Essential PMP Formulas Project SelectionReturn on Invested Capital (ROIC) = Net Profit after Tax Total Capital InvestedEconomic Value Add (EVA) = Net Profit after Tax Cost of CapitalBenefit Cost Ratio (BCR) = Benefit Cost (Values > 1 is desirable)Net Present Value (NPV) = Present Value of the total benefits Costs over a period (the bigger the value, the better)

CommunicationCommunication Channels = N (N 1) 2, where N = the number of people in the project team

Earned ValueBAC = Total Budgeted for the projectPV = Planned % Complete * BACEV = Actual % Complete * BACAC = Sum of the actual costsCV = EV AC (Negative CV shows we are over budget)SV = EV PV (Negative SV shows we are behind schedule)CPI = EV AC (For a given period of time)CPIC = EVC ACC (Cumulative from the beginning to a given point in time)SPI = EV PV EAC = BAC CPICETC = EAC ACVAC = BAC EAC TCPI = (BAC EV) Remaining Funds (where remaining funds is calculated as BAC AC or EAC AC)** SPI or CPI > 1 shows that you are ahead on schedule or under budget ** SPI or CPI = 1 shows that you are on target (performance is as planned)** SPI or CPI < 1 shows that you are behind schedule or over budget

EstimatingPERT Estimates a.k.a. Three-Point Estimates = (P + 4R + O) 6, where P = Pessimistic, R = Realistic or Most Likely, O = OptimisticStandard Deviation (SD) = (P O) 6, where P = Pessimistic, O = OptimisticActivity Variance = (SD) or [(P O 6) * (P O 6)], where P = Pessimistic, O = OptimisticRange of an Activity Duration = EAD +/- SD, where EAD = Expected Activity Duration or PERT EstimateOrder of Magnitude or Ball Pack Estimate = 50% to +100% Definitive Estimate = 15% to +20%

SchedulingActivity Duration = EF ES + 1, where EF = Early Finish, ES = Early StartLate Finish = LS + Activity Duration 1, where LS = Late StartFloat = LS ES or LF EF** Early Start, Late Start or Early Finish can be derived from any of the above formulas by substitution method when the necessary variables are known

Procurement PlanningPoint of Total Assumption = Target Cost + ((Ceiling Price Target Price) Buyers % Share) where Ceiling Price = A Cap or the highest price the buyer will pay, Target Cost = Expected cost of product or service (Sellers cost plus profit), Target Price = Overall expected cost of the contract (target cost + target incentive fee), Sharing Ratio = Describes how cost savings or overrun will be shared; X : Y = buyer % : seller %

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