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Formulas to Know for EXAM
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
𝑂+𝑀+𝑃
EAD =
3
PERT Beta Distribution
𝑂 + 4𝑀 + 𝑃
EAD =
6
Standard Deviation (SD) of an Activity
𝑃−𝑂
SD =
6
Variance of an Activity
𝑃−𝑂 2
Variance = ( )
6
Range of an Activity Duration
Range of an Activity Duration = EAD ± 𝑆𝐷
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.
Total Float = Late Start (LS) – Early Start (ES)
Total Float = Late Finish (LF) – Early Finish (EF)
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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)
CV = EV − AC
Schedule Variance (SV)
SV = EV − PV
Cost Performance Index (CPI)
𝐸𝑉
CPI =
𝐴𝐶
Schedule Performance Index (SPI)
𝐸𝑉
SPI =
𝑃𝑉
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.
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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.
ETC=Re-estimation of Remaining Works
ETC = EAC − AC
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.
EAC = AC + (BAC − EV)
Approach #2: assumes that cost performance achieved till now is expected to
continue in the future.
BAC
EAC =
CPI
Approach #3: assumes that ETC work will be performed at an efficiency rate that
considers both the cost and schedule performance indices.
BAC − EV
EAC = AC +
CPI x SPI
Variance at Completion (VAC)
VAC = BAC − EAC
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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:
𝐵𝐴𝐶 − EV
TCPI =
BAC − AC
Approach #2:
𝐵𝐴𝐶 − EV
TCPI =
EAC − AC
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
FV
PV =
(1 + r)n
Number of Communication Channels Formula
If there are N stakeholders in an environment, following formula will give total number of
communication channels between stakeholders in this environment.
N(N − 1)
Number of Communication Channels =
2
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Expected Monetary Value
Expected Monetary Value (EMV) of an opportunity or threat is calculated by following
formula:
EMV = Probability x Impact
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.
Ceiling Price − Target Price
PTA = + 𝑇𝑎𝑟𝑔𝑒𝑡 𝐶𝑜𝑠𝑡
Buyer ′ s Sharing Ratio
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