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DCM Learning - Project Management - Formulas To Know

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27 views8 pages

DCM Learning - Project Management - Formulas To Know

Uploaded by

hurrjani149
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Project Management

Formulas
Project Management Formulas

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Activity & Project Duration Formulas


In order to calculate Estimated Activity Duration (EAD) of an activity, Optimistic (O), Most
Likely (M) and Pessimistic (P) estimates for an activity are determined first.

PERT Triangular Distribution

PERT Beta Distribution

Standard Deviation (SD) of an Activity

Variance of an Activity

Range of an Activity Duration

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Project Management Formulas

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Float (Slack) Formulas


Float (Slack) of an activity determines how long an activity can be delayed without
affecting the project end date. If an activity is on critical path, float (slack) of that activity
will be zero.

In order to calculate Float (Slack) of an activity, Late Start (LS) and Early Start (ES) or
Late Finish (LF) and Early Finish (EF) values of the activity are determined first.

Earned Value Management Formulas


Abbreviations of Earned Value Terms:

● Earned Value = EV
● Planned Value = PV
● Actual Cost = AC
● Cost Variance = CV
● Schedule Variance = SV
● Cost Performance Index = CPI
● Schedule Performance Index = SPI
● Budget at Completion = BAC
● Estimate to Complete = ETC
● Estimate at Completion = EAC
● Variance at Completion = VAC
● To-Complete Performance Index = TCPI

Cost Variance (CV)

Schedule Variance (SV)

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Project Management Formulas

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Cost Performance Index (CPI)

Schedule Performance Index (SPI)

Budget at Completion (BAC)

BAC is determined during cost management activities, in Determine Budget Process, in a


project. BAC includes contingency reserves for activities and defines how much money
will be spent during project in total.

Estimate to Complete (ETC)

ETC can be determined by re-estimation of the remaining works in a project or earned


value (EV) of the accomplished activities can be subtracted from EAC to find ETC value.

Estimate at Completion (EAC)

EAC value can be found by 3 different approaches using EV, SPI and CPI values.

Approach #1: assumes that all future ETC work will be accomplished at the budgeted
rate.

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Project Management Formulas

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Approach #2: assumes that cost performance achieved till now is expected to continue
in the future.

Approach #3: assumes that ETC work will be performed at an efficiency rate that
considers both the cost and schedule performance indices.

Variance at Completion (VAC)

To-Complete Performance Index (TCPI)


TCPI can be calculated by two approaches. If there is not a new EAC value, 1st approach
is used. If there is an EAC value, then 2nd approach is used.

Approach #1:

Approach #2:

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Project Management Formulas

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Present Value Formula


There is time value of money and value of a future cash flow is less today than its amount
in future. This is calculated by Present Value (PV) formula. Abbreviations of terms:

● Present Value = PV
● Future Value = FV
● Interest rate = r
● Number of periods = n

Number of Communication Channels


If there are N stakeholders in an environment, following formula will give total number of
communication channels between stakeholders in this environment.

Expected Monetary Value


Expected Monetary Value (EMV) of an opportunity or threat is calculated by following
formula:

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Project Management Formulas

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Point of Total Assumption


Point of Total Assumption (PTA) is applicable only in Fixed Price Incentive Fee (FPIF)
Contracts. Costs above PTA level are considered to be due to mismanagement. PTA is
calculated by following formula.

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Project Management Formulas

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