PMP Formula Guide

Copyright © 2019 by PM Study Circle

All rights reserved. Content available in this eBook is copyrighted to PM Study Circle 2019. No part of this eBook may be reproduced or transmitted in any form or by any means without the express permission from the author.

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PMP, PMBOK Guide, and PMI are registered trademarks of Project Management Institute (PMI), USA.

Published by Mohammad Usmani, PMP, PMI-RMP at Smashwords

Version: 4.01

Table of Contents

Introduction

Schedule Management

Cost Management

Communications Management

Risk Management

Procurement Management

Miscellaneous Formulas

Cheat Sheet

Introduction

Usually professionals who are preparing for the PMP Certification Exam find two types of questions difficult to solve in their exam.

The first type of question is based on input, tool & technique, and output (ITTO).

With ITTO based questions, you will be given four choices and you have to identify the correct input, tool & technique or the output for the given process in the question.

It is almost impossible to remember each ITTO for the exam. However, if you study properly and understand the project management process flow, these questions will be a piece of cake for you.

The second type of challenging question is the mathematical questions.

These questions involve mathematical calculations and then interpretation. Many people find these types of questions very difficult and tend to avoid them.

Believe me, mathematical questions are very easy to solve and can help you score better in the exam. You only need to understand the concept and logic behind each formula and give them a little practice.

In this eBook, I have explained all the formulas mentioned in the PMBOK Guide. I have also included some other formulas, which are not available in the guide, but questions based on these formulas may appear on the exam.

I strongly believe that once you have gone through this guide, you will not have any problem facing any mathematical question in your PMP Exam.

I hope this guide will help you in your endeavor; however, if you have any suggestions or comments, you are welcome to contact me.

Thanks.

Regards,

M Fahad Usmani, PMP, PMI-RMP

[email protected]

Schedule Management

The schedule management knowledge area is one of the most important chapters in the PMBOK Guide from a PMP exam point of view.

You are going to see many questions from this chapter in the exam; therefore, be sure to study this chapter thoroughly and make sure you are able to solve all practice questions given in this chapter.

In the exam, you can see questions from following given topics:

- Triangular Distribution

- Beta Distribution (PERT)

- Standard Deviation, Variance

- Critical Path Method

- Type of Dependency

- Total Float and Free Float

- Schedule Compressions Technique

- Crashing

Now let us discuss each of them in detail.

Triangular and beta distribution are used to calculate the activity duration. To calculate triangular or beta estimate you use three estimates for each activity:

1) Optimistic Estimate

2) Pessimistic Estimate

3) Most Likely Estimate

The optimistic estimate is the least possible time in which the activity can be finished. It is denoted by to.

The pessimistic estimate is the worst-case scenario. Here you assume the worst case for the activity to complete. Simply put, this is the maximum time required to complete an activity. It is denoted by tp.

The most likely estimate is the most probable time the activity will take to be completed. It is denoted by tm.

Once you get these three estimates, you can calculate the triangular or beta estimate very easily.

Triangular Distribution

In triangular distribution, the mean is equal to the sum of these three, and divided by three.

Mean = (Optimistic + Most-likely + Pessimist) / 3

Or,

Expected Duration (Triangular Distribution) te = (to + tm + tp) / 3

Example:

Your team member told you that in your project, the painting work may take 20 days to complete. However, if the weather is not favorable it will take 26 days. He also told you that if all conditions are good, the painting can be completed in 18 days.

Using triangular distribution, calculate the expected duration for this activity.

Solution:

According to triangular estimate,

Expected Duration te = (to + tm + tp) / 3

Given data:

tm = 20 days

tp = 26 days

to = 18 days

Therefore, the expected duration = (20 + 26 +18) / 3

= 21.33 days

***

Practice Question: 1

You have been given a task, which might take 60 days to complete; however, if the conditions are favorable, it might be completed in 55 days. In the worst-case scenario, it may take 70 days.

Find the average estimate for this task using triangular estimate.

***

Beta Distribution (PERT)

In triangular distribution, each estimate is given equal weightage, added to each other, and then divided by three.

However, in beta distribution, which is also known as PERT (Program Evaluation and Review Technique), the most likely estimate is given more weightage, i.e. four times. Afterwards, all estimates are added and divided by six.

Expected Duration (Beta Distribution) te = (to + 4tm + tp) / 6

Standard Deviation and Variance

Standard deviation is the amount of variation in a data set. It is the measure of how the numbers are spread.

A low standard deviation means that data points are close to the mean of the set, and a high standard deviation means that the data points are spread out over a wider range.

Standard Deviation (SD) = (tp – to) / 6

Variance is the square of the standard deviation.

Variance = (SD)²

Example:

For any activity, you estimate that it can be completed within 10 days. If the weather conditions are bad, this activity can take about 11 days. However, if all conditions are favorable, this activity can be completed in 7 days.

Using PERT, calculate the three point estimate, standard deviation, and variance for this activity.

Solution:

We know the PERT estimate formula:

te = (to + 4tm + tp) / 6

Here:

te = PERT Estimate = to be calculated

to = Optimistic Time = 7 days

tm = Most Likely Time = 10 days

tp = Pessimistic Time = 11 days

Substituting these values in the PERT formula:

te = (to + 4tm + tp ) /6

= (7 + 4 * 10 + 11) / 6

= (7 + 40 +1 1) / 6

= 58 / 6

= 9.6 days.

Hence, the PERT estimate for this activity is 9.6 days.

Standard Deviation = (tp – to) / 6

= (11 – 7) / 6

= 4 / 6

= 0.67

Now,

Variance = (Standard Deviation)²

= 0.67 * 0.67

= 0.45

***

Practice Question: 2

You have been given a task, which may take 60 days to complete; however, if the conditions are favorable, it may be completed in 55 days. In the worst-case scenario, it may take 70 days.

Find the PERT estimate, standard deviation, and variance for this task.

***

Critical Path Method

You can define the critical path in many ways, such as:

- The critical path is the longest path in the network diagram,

or

- The critical path is the shortest duration in which the project can be completed.

So you can say that in any network diagram, the duration of the critical path is the duration of the project, and no other path can be longer than the critical path.

The critical path has a zero float and so the activities on it will also have the zero float. The activities on the critical path are known as critical activities.

Terms Used in Network Diagram Method

Before we start identifying the critical path and calculating total float, free float, early start, early finish, etc., let us take a quick look at the definitions of these terms.

Total Float: The amount of time that the activities or tasks on a non-critical path can be delayed by without affecting the project schedule. The total float is also known as float or slack.

Total Float = Late Finish Early Finish

On a critical path, float or slack is zero.

Free Float: Free float is associated with activities. Free float is the amount of time that an activity is delayed by without affecting the early start of the next activity.

Free float of Activity X = Early Start of next Activity – Early Finish of Activity X – 1

Early Start: The earliest time when an activity can