Useful Formulae

Concept Formula Explanation Sample Question

Paths of communications that exist in a project. How many communication channels

(N(N-1))/2 More people in the project translates to more are added when you add three people
Number of communication communication paths. Make sure to count the PM to a four person team that includes
channels as well. the PM?

The following 2 tasks are on the

(P+4ML+O)/6 To determine the expected value. How close are
the values clustered (Centering). To calculate the
mean (average) value based on the normal
distribution. Pert can be used to calculate the
average of a any data set for example average
PERT duration, average cost etc.,
critical path. Path A has a Optimistic
(4 days), Pessimistic (8 days) and Most
likely (6 days) estimates for duration.
Path B has O (6 days), P (9 days), ML
(8 days). Based on the Pert estimate
for duration of each task, calculate
the project duration.

Based on the Pert values of O(12

days), P(18 days), ML (14 days) for
(P-O)/6
How far apart are the values from each other the duration of an activity, how long
(variation). A data set with high standard deviation would the activity take to complete
indicates that the values are far from each other expressed with an accuracy of one
Standard Deviation and are not close to the average. standard deviation?

(+1 -1 Std Dev - 68.26% ) A normal distribution is the most common A process has mean of 12 days &
(+2 -2 Std Dev - 95.46%) probability density distribution chart. It is in the Standard Deviation of 1. What is the
(+3 -3 Std Dev - 99.73%) shape of a bell curve and is used to measure probability that the process will be
Normal Distribution (+6 -6 Std Dev - 99.9997%) variations. completed in 13 days?

Triangular distribution is preferred when you have Based on three point estimates O(16),
(O+ML+P)/3
Expected value based on estimates based on the judgemental data P(22), ML(18), assuming triangular
Triangular Distribution submitted to you distribution, what is the mean value?

Median is the middle value of the given numbers or
Middle Value distribution in their ascending order. For an odd
set of numbers, the median is the middle number.
For an even set of numbers, the median is the
Median average of the middle two numbers.
You have received the following
values from your statistical sampling:
80, 83, 85, 90, 82, 88, 90, 91, 94, 79.
What is the median of this number
set?

Mode is the most frequently occurring value in a

Most Frequently occurring number
Mode
Earned Value (EV)
Planned Value (PV)
Cost Variance (CV)
Schedule Variance (SV)
Cost Performance Index (CPI)
Schedule Performance Index
(SPI)
frequency distribution. A data set can have more
than 1 mode. Find the mode of 11,3,5,11,7,3,11 ,3
Value of work completed. Budgeted cost of work
BAC * % work PERFORMED performed.
Value of Work Scheduled. Budgeted cost of work
BAC * % work PLANNED scheduled
Negative indicates Over Budget, Positive indicates
EV-AC Under budget
Negative indicates - Behind Schedule, Positive
EV-PV indicates Ahead of Schedule
Greater than 1 - indicates Under Budget, Less than
EV/AC 1 indicates Over Budget
Greater than 1 indicates Ahead of schedule, less
EV/PV than 1 indicates behind schedule

As of now, how much do we expect the total

project to cost?
BAC/CPI
Estimate At Completion BAC/CPI - Used when current variances are
(EAC) 1 expected to continue into the future
 As of now, how much do we expect the total
project to cost?
AC + ETC
Estimate At Completion AC + ETC - used when the original estimating
(EAC) 2 assumptions are flawed or no longer relevant

As of now, how much do we expect the total

project to cost?
AC + (BAC -EV)
AC + (BAC - EV) - Used when current variances are
Estimate At Completion seen as atypical and expectations are that similar
(EAC) 3 variances will not occur in the future

Lekha has to paint 8 walls at $ 100

per wall, in 4 days. Each wall requires
BAC - EAC ½ day to paint. At the end of 3 days,
Lekha has 8 walls completed at the
cost of $120.00 per wall. Find the VAC
Variance At Completion How much over or under budget will we be at the for the project.
(VAC) end of the project
Schedule Variance
Percentage (SV/PV) * 100

Cost Variance Percentage (CV/EV) *100

What is the Net Present value of an
Present Value (Single time FV / (1 + R) raised to n Value today of future cash flows. R - rate, n - time annual income flow of $ 2200 at 5%
period) period over the next 4 years?

What is the Net Present value of an

Present Value of Cash inflows - Initial
Net Present Value (All time annual income flow of $ 2200 at 5%
Investment (for each time period)
periods) Total of the present values for all time periods over the next 4 years?

Internal Rate of Return (IRR) Higher the better

ROI Net Profit/Net Assets Higher the better
Payback Period Shorter the better

Fee = (Target Cost – Actual Cost) x For FPIF Contract - Final Price paid to the seller
Incentive Fee Seller Ratio (%) should not exceed the ceiling price

EMV is calculated by multiplying the value of each

possible outcome by its probability of ocurrence.
Probability * Amount at Stake
Expected Monetary Value Calculate the EMV for all possible outcomes and
(EMV) add them together.

LS-ES or LF - EF Amount of Time and activity may be delayed from

Total Float its ES without delaying the project finish date

Amount of Time an activity can be delayed without

ES (Successor) - ES - Duration delaying the ES of any immediately following
Free Float activities