25 PMP Formulas to Pass the PMP Certification Exam

By
Ainjlla Berry
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Are you planning to appear for the Project Management Professional (PMP) certification exam? If yes, then you can’t afford to be unaware of the PMP formulas, which is the major determining factor for passing the PMP certification exam. Even though the weightage of questions based on those formulas can’t be determined, the experienced PMPs advice not to miss these formulas at any cost.

While appearing in the PMP certification exam, a candidate will encounter some direct and simple questions based on these PMP formulas. Subsequently, these formulas-based questions are the most mark fetching questions of the lot, and all that a candidate needs to is put the corrective data and find the solution. The main purpose of these formula-based questions is to check a candidate’s understanding and in-depth knowledge about various concepts that will be required while managing a project. Eventually, the candidate has an opportunity to not just score good marks, but also showcase his in-depth knowledge about project management while answering such formula-based questions.

The list of PMP formulas

Here is the list of the most essential 25 PMP formulas that are needed to pass the PMP certification exam:

  1. Cost Variance: Two variables are required to calculate Cost Variance (CV); they are Earned Value (EV) and Actual Cost (AC).

CV = EV-AC

  1. Schedule Variance: There are two variables that are required to calculate Schedule Variance (SV); they are Earned Value (EV) and Planned Value (PV).

SV = EV-PV

  1. Cost Performance Index: There are two variables that are required to calculate the Cost Performance Index (CPI), they are Earned Value (EV) and Actual Cost (AC)

CPI = EV/AC

  1. Schedule Performance Index: There are two variables that are required to calculate the Schedule Performance Index (SPI); they are Earned Value (EV) and Planned Value (PV).

SPI = EV/PV

  1. Estimate at Completion: There are two variables that are required to calculate Estimate at Calculation (EIC), they are Actual Cost (AC) and Estimate to c Complete (ETC).

EIC = AC + Bottom-up ETC

  1. Estimate at Completion: There are two variables that are required to calculate Estimate at Completion (EAC), they are Budget at Completion (BAC) and Cost Performance Index (CPI).

EAC = BAC/ Cumulative CPI

  1. Estimate at Completion (If BAC is constant): There are two variables that are required to calculate Estimate at Completion (EAC) when Budget at Completion (BAC) remains constant. The two variables are the Actual Cost (AC) and Earned Value (EV).

EAC = AC + (BAC – EV)

  1. Estimate at Completion (If substandard performance is still prevailing): There are five variables that are required to calculate Estimate at Completion (EAC) when substandard performance is still prevailing. They are Actual Cost (AC), Earned Value (EV), Budget at Completion (BAC), Cost Performance Index (CPI) and Schedule Performance Index (SPI).

EAC = AC + [BAC – EV / (Cumulative CPI * Cumulative SPI)]

  1. Number of Communication Channels: The only variable that’s required to calculate the number of communication channels is the number of members in the team (n)
  2. of communication channels = n (n-1)/2
  3. Earned Value: There are two variables that are required to calculate Earned Value (EV), they are completion % and Budget at Completion (BAC)

EV = % complete * BAC

  1. Variance at Completion: There are two variables that are required to calculate Variance at Completion (VAC), they are Estimate at Completion (EAC) and Budget at Completion (BAC).

VAC = BAC – EAC

  1. Estimate to Complete: There are two variables that are required to calculate Estimate to Complete (ETC), they are Estimate at Completion (EAC) and Actual Cost (AC).

ETC = EAC – AC

  1. To Cost Performance Index: There are four variables that are required to calculate To Cost Performance Index, they are Budget at Completion (BAC), Earned Value (EV), Estimate at Completion (EAC) and Actual Cost (AC).

TCPI = (BAC – EV) / (EAC – AC)

  1. Standard Deviation: There are two variables that are required to calculate Standard Deviation (SD); they are Pessimistic and Optimistic.

SD = (Pessimistic – Optimistic) / 6

  1. Pert Formula Beta = (P + 4M + O) / 6
  2. Expected Monetary Value: There are two variables that are required to calculate Expected Monetary Value (EMV), they are Probability and Impact.

EMV = Probability * Impact

  1. Risk Priority Number (RPN) = Detection * Occurrence * Severity
  2. Cost Plus Percentage of Cost (CPPC) Contract: Cost + Fee%
  3. Cost Plus Fixed Fee (CPPF) Contract: Cost + Amount of fees
  4. Cost Plus Award Fee (CPAF) Contract: Cost + Amount of award fee
  5. Cost Plus Incentive Fee (CPIF) Contract: Cost + Amount of incentive fee
  6. Return on Investment (ROI): [Net Profit (NP) / Cost of Investment (COI)] 8 100
  7. Target Price = Target Cost + Target Fee
  8. Cost Benefit Ration (CBR): New Present Value of Investment/ Initial Investment Cost
  9. Payback Period = Initial Investment/ Periodic Cash Flow