Important PMP/CAPM Formulas

Mudassir IqbalMay 22, 2023PMP ConceptsNo comments

1. Earned Value Management (EVM)

Definitions and Concept

EV = Earned Value Management
SV = Schedule Variance
PV = Planned Value
AC= ” Actual Cost
CPI = Cost Performance Index : Behind/Over Budget > 1 > Ahead/Under of Budget
SPI = Schedule Performance Index : Behind Schedule > 1 > Ahead of Schedule
ETC = Estimate to Complete
EAC = Estimate at completion (Forecasted Value based on performance)
VAC = Variance at Completion (forecasted)

Formulas

SV = EV – PV
CV = EV – AC
SPI = EV / PV
CPI = EV / AC
ETC = (BAC – EV) / CPI
EAC = AC + ETC
EAC = AC + (BAC – EV) : If future work will be completed at the planned rate
EAC = BAC / CPI : If the CPI is expected to be the same for the remainder of the project
VAC = BAC – EAC
TCPI = (BAC – EV) / (BAC – AC)

2. Network Diagrams

Activity Duration = EF-ES +1
Total Float (TF) = LS – ES
TF = LF – EF
Free Float (FF) = ES_(Successor) – ES_(Present) – Dur_(Present)

3. Project Estimation

E (PERT Analysis/BETA Distribution) = (O + P + 4*M) / 6
PERT Standrd Diviation σ = (P – O) / 6
E (3-Point Estimate) = (O + P + M) / 3
Var = σ⁽²⁾

Standard Deviation/ PERT Analysis Download

4. Project Selection Methods

Present Value PV = FV / (1 + r)ⁿ
Future Value FV = PV * (1+ r )ⁿ
NPV = ∑PV (This is sum of all PV)
ROI = Return / Investment
BCR = Benefits / Costs
Payback Period = Initial Investment / Periodic CashFlow

5. Expect Monetary Value (EMV)

EMV_(R) = P*I
EMV_(P) = ∑EMV_(R)
Net Benefit = EMV_(P) – Cost

6. Communication Channels

C = n*(n – 1)/2

7. Procurement Management (Point of Total Assumption)

Pt. of Total Assumption (PTA) = CP-TP/Buyer’s Share Ratio + TC

8. Risk Probability

Expected Monetary Value (EMV) = Probability * Impact : always <1

9. Values

1 Sigma = 68.26%

2 Sigme = 95.46%

3 Sigma = 99.73%

6 Sigma = 99.99% (3.4 defects in one million)

Control Limits = 3 Sigma from Mean

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

Preliminary Estimate = -15% to 25%

Budget Estimate = -10% to +25%

Definitive Estimate = -5% to +10%

Preto Chart = 80/20

–> Download the PMP Formula File

Mudassir Iqbal

Mudassir, the COO of AnaConEx Solutions, oversees operations across Pakistan, UAE, KSA, and the USA. With over 50 successful Odoo implementations since 2020, he ensures tailored solutions for businesses across industries. With more than 20 years of experience in leadership, project management, and business consulting, Mudassir is passionate about empowering others. He offers **PMP Certification courses** with a 100% success rate, along with **leadership coaching** to help professionals unlock their potential. As a mentor, Mudassir supports aspiring leaders in building essential skills, including **team building, communication, and soft skills**. His mentorship prepares professionals to tackle career challenges confidently. Beyond consulting, Mudassir is a dynamic **speaker and host**. He conducts webinars, conferences, and podcasts, including *TechTalk with Mudassir* and *Elevate to Leadership*, sharing insights on technology, leadership, and career growth. Through his writing platform, *My Corner!*, he reflects on two decades of professional experience, offering **practical advice and thought leadership** on topics like **ERP, digital transformation, and project management**. Mudassir is also the founder of **Know Your Project (KYP)**, an IT consulting and training firm. He has led **global digital transformation projects** in industries like finance, manufacturing, telecom, and logistics, with deep expertise in **BPR, IT governance, and ERP strategy** using platforms like Oracle, SAP, Microsoft Dynamics, and Odoo. Join Mudassir’s journey as he continues to shape leaders, drive operational excellence, and inspire meaningful change across industries.