15) PMP Formulas and Calculation

PMP Formulas and Calculation for the Certification Demystified

Many consider the most difficult part of the PMP exam to be the calculations and PMP formulas. Luckily PMP calculation is not quantum physics, you just need to understand and memorize the following PMP Calculation formulas.

PMP Formulas
Name (Abbreviation)	Formula	Interpretation
No. of Communication Channels	n (n-1)/2 n = number of members in the team	n should include the project manager e.g. if the no. of team members increase from 4 to 5, the increase in communication channels: 5(5-1)/2 – 4(4-1)/2 = 4
Schedule Performance Index (SPI)	SPI = EV/PV EV = Earned Value PV = Planned Value	< 1    behind schedule = 1    on schedule > 1    ahead of schedule
Cost Performance Index (CPI)	CPI = EV/AC EV = Earned Value AC = Actual Cost	< 1    Over budget = 1    On budget > 1    Under budget sometimes the term ‘cumulative CPI’ would be shown, which actually is the CPI up to that moment
Schedule Variance (SV)	SV = EV – PV EV = Earned Value PV = Planned Value	< 0    Behind schedule = 0    On schedule > 0    Ahead of schedule
Cost Variance (CV)	CV = EV – AC EV = Earned Value AC = Actual Cost	< 0    Over budget = 0    On budget > 0    Under Budget
Estimate at Completion (EAC) if original is flawed	EAC = AC + New ETC AC = Actual Cost New ETC = New Estimate to Completion	if the original estimate is based on wrong data/assumptions or circumstances have changed
Estimate at Completion (EAC) if BAC remains the same	EAC = AC + BAC – EV AC = Actual Cost BAC = Budget at completion EV = Earned Value	the variance is caused by a one-time event and is not likely to happen again
Estimate at Completion (EAC) if CPI remains the same	EAC = BAC/CPI BAC = Budget at completion CPI = Cost performance index	if the CPI would remain the same till end of project, i.e. the original estimation is not accurate
Estimate at Completion (EAC) if substandard performance continues	EAC = AC + (BAC -EV)/(CPI*SPI) AC = Actual Cost BAC = Budget at completion EV = Earned Value CPI = Cost Performance Index SPI = Schedule Performance Index	use when the question gives all the values (AC, BAC, EV, CPI and SPI), otherwise, this formula is not likely to be used
To-Complete Performance Index (TCPI)	TCPI = (BAC – EV)/ (BAC – AC) BAC = Budget at completion EV = Earned value AC = Actual Cost TCPI = Remaining Work /Remaining Funds BAC = Budget at completion EV = Earned value CPI = Cost performance index	< 1    Under budget = 1    On budget > 1    Over budget
Estimate to Completion	ETC = EAC -AC EAC = Estimate at Completion AC = Actual Cost
Variance at Completion	VAC = BAC – EAC BAC = Budget at completion EAC = Estimate at Completion	< 0    Under budget = 0    On budget > 0    Over budget
PERT Estimation	(O + 4M + P)/6 O= Optimistic estimate M= Most Likely estimate P= Pessimistic estimate
Standard Deviation	(P – O)/6 O= Optimistic estimate P= Pessimistic estimate	this is a rough estimate for the standard deviation
Float/Slack	LS – ES LS = Late start ES = Early start LF – EF LF = Late finish EF = Early finish	= 0    On critical path < 0    Behind

Hope, the series of my blogs in PMI - PMP (PMBOK 5)  is informative and useful inputs for your exam if you are preparing for PMP Certificate. All the very best!