Project Management Professional

(PMP)
PMP Study Notes & Formula Guide

Knowledge Areas (9)

Project
Integration
Management

Project Scope
Management

Project Time
Management

Project Cost
Management

Project Quality
Management

Project Human
Resource
Management

Project
Communications
Management

Project Risk
Management

Project
Procurement
Management

Leverage Blueprint - PMP Study Notes & Formula Guide

Processes (5)

Initiation

Planning

Monitor
and Control

Leverage Blueprint - PMP Study Notes & Formula Guide

Execution

Closing

Project Management Processes (42)

Project Integration
Management

Develop Project
Charter
Develop Project
Management Plan
Direct / Manage
Project Execution
Monitor / Control
Project Work
Perform Integrated
Change Control
Close Project or
Phase
Leverage Blueprint - PMP Study Notes & Formula Guide

Project Scope Management

Project Management Processes (42)

Leverage Blueprint - PMP Study Notes & Formula Guide

Collect
Requirements
Define Scope
Create WBS
Verify Scope
Control Scope
5

Project Management Processes (42)

Project Time Management

Define Activities
Sequence
Activities

Estimate Activity
Resources
Estimate Activity
Durations
Develop Schedule
Control Schedule

Leverage Blueprint - PMP Study Notes & Formula Guide

Project Cost Management

Project Management Processes (42)

Estimate Costs
Determine Budget

Leverage Blueprint - PMP Study Notes & Formula Guide

Control Costs

Project Quality Management

Project Management Processes (42)

Leverage Blueprint - PMP Study Notes & Formula Guide

Plan Quality
Perform Quality
Assurance

Perform Quality
Control

Project Human Resource

Management

Project Management Processes (42)

Leverage Blueprint - PMP Study Notes & Formula Guide

Develop Human
Resource Plan
Acquire Project
Team
Develop Project
Team
Manage Project
Team
9

Project Communications
Management

Project Management Processes (42)

Identify
Stakeholders
Plan
Communications

Distribute
Information
Manage Stakeholder
Expectations
Report Performance

Leverage Blueprint - PMP Study Notes & Formula Guide

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Project Management Processes (42)

Project Risk Management

Plan Risk
Management
Identify Risks
Perform Qualitative
Risk Analysis
Perform Quantitative
Risk Analysis
Plan Risk Responses
Monitor and Control
Risks
Leverage Blueprint - PMP Study Notes & Formula Guide

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Project Procurement
Management

Project Management Processes (42)

Leverage Blueprint - PMP Study Notes & Formula Guide

Plan
Procurements
Conduct
Procurements
Administer
Procurements
Close
Procurements
12

Network Diagram
Activity Duration = EF ES + 1
or
Activity Duration = LF LS + 1

Total Float = LS - ES or
Total Float = LF EF

Free Float = ES of
Following - ES of
Present - DUR of
Present

EF = ES + duration - 1

ES = EF of predecessor +
1

LF = LS of successor - 1

LS = LF - duration + 1

Leverage Blueprint - PMP Study Notes & Formula Guide

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Project Selection
PV = FV / (1+r)^n

ROI = Formula not

required. Select biggest
number.

BCR = Benefit / Cost

FV = PV * (1+r)^n

NPV = Formula not

required. Select biggest
number.

IRR = Formula not

required. Select biggest
number.

Payback Period = Add

up the projected cash
inflow minus expenses
until you reach the
initial investment.

CBR = Cost / Benefit

Opportunity Cost = The

value of the project not
chosen.

Leverage Blueprint - PMP Study Notes & Formula Guide

14

Earned Value Management

BAC = Budget At
Completion

EV = Actual % *
BAC

PV = Planned % *
BAC

AC = Sum of all
incurred costs

CPI = EV / AC

SPI = EV / PV

< 1 = Over Budget

> 1 = Under Budget

< 1 = Behind Schedule

> 1 = Ahead of
Schedule

CV = EV - AC

SV = EV - PV

EAC = BAC / CPI

EAC = AC + ETC

EAC = AC + (BAC +
EV) / CPI

ETC = EAC - AC

VAC = BAC - EAC

BCWS = PV

BCWP = EV

ACWP = AC

Leverage Blueprint - PMP Study Notes & Formula Guide

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TIPS: Earned Value Management

Negative is
bad

Positive is
good

If Variance: EV
- Something

If Index: EV /
Something

If Cost related
use AC

If Time related
use PV

Most formulas
start with EV
Leverage Blueprint - PMP Study Notes & Formula Guide

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PERT
PERT 3-point =
(Pessimistic+(4*Most
Likely)+Optimistic)/6

PERT = (Pessimistic Optimistic) / 6

PERT Activity
Variance =
((Pessimistic Optimistic) / 6)^2

PERT Variance all

activities =
sum((Pessimistic Optimistic) / 6)^2

Leverage Blueprint - PMP Study Notes & Formula Guide

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Values
1 sigma = 68.26%

6 sigma = 99.99%

2 sigma = 95.46%

3 sigma = 99.73%

Control Limits = 3
sigma from mean

Control Specifications
= Defined by
customer; looser than
the control limits

Order of Magnitude
estimate = -25% to
+75%

Leverage Blueprint - PMP Study Notes & Formula Guide

Preliminary estimate =
-15% to + 50%

18

Values
Budget estimate =
-10% to +25%

Definitive estimate
= -5% to +10%

Final estimate = 0%

Float on the critical

path = 0 days

Pareto Diagram =
80/20

Time a PM spends
communicating =
90%

Crashing a project
= Crash least
expensive tasks on
critical path.

JIT inventory = 0%
(or very close to
0%.)

Minus 100 = (100)

or -100

Leverage Blueprint - PMP Study Notes & Formula Guide

19

Procurement

PTA = ((Ceiling Price

- Target Price) /
Buyer's Share Ratio)
+ TargetCost
Leverage Blueprint - PMP Study Notes & Formula Guide

20

Depreciation
Double Declining Balance Method:
Depr. Rate = 2 * (100% / Useful Life)
Straight-line Depreciation:
Depr. Expense = Asset Cost / Useful
Life
Depr. Rate = 100% / Useful Life

Depr. Expense = Depreciation Rate *

Book Value at Beginning of Year
Book Value = Book Value at beginning
of year - Depreciation Expense

Sum-of-Years' Digits Method:

Sum of digits = Useful Life + (Useful
Life - 1) + (Useful Life - 2) + etc.

Depr. rate = fraction of years left and

sum of the digits (i.e. 4/15th)

Leverage Blueprint - PMP Study Notes & Formula Guide

21

Human Resource Management

Organizational Structures:
Functional, Matrix (weak,
balanced, strong) , Projectized,
Composite

Ouchi:
Theory Z. Motivated by
commitment, opportunity
advancement.

Maslows Hierarchy of
Needs:

McGregor:
Theory X, Theory Y.

Physiological, Safety, Social, Selfesteem, Self-actualization.

Herzbergs Theory of
Motivation:
Hygiene factors, Motivating
Agents.

Leadership Styles:
Directing, Facilitating, Coaching,
Supporting, Autocratic,
Consultative, Consensus.

Project Manager Powers:

Conflict Management:

Formal (legitimate,) Reward,

Penalty (coercive), Expert,
Referent.

Withdraw (avoid), Smooth

(accommodate), Compromise,
Force, Collaborate, Confront
(problem solving.)

Leverage Blueprint - PMP Study Notes & Formula Guide

22

Quality Management
Ishikawa = Fishbone
Diagram: cause and
effect.

Pareto Diagram:
Identify problems and
frequency. 80/20 Rule.

Flow Charts; Control

Charts.

Just in Time: Reduces

inventory; requires
additional quality
control.

Quality Theories: Kaizen

(continuous
improvement,) Six
Sigma, TQM (total
quality management.)

Kaizen: Small
improvements to
reduce costs and
improve consistency.

Deming Cycle: Plan, Do

Check, Act

Leverage Blueprint - PMP Study Notes & Formula Guide

23

Risk Management
Risk Strategies (threats):
Avoid
Transfer
Mitigate
Accept

Risk Strategies
(opportunities):

Qualitative Risk Analysis:

Chance and impact of risk
occurrence Results in
prioritized list of risks; risk
ranking.

Exploit
Share
Enhance
Accept

Tools:
Quantitative Risk Analysis:
Numerical analysis of
probability and impact.

Leverage Blueprint - PMP Study Notes & Formula Guide

Interviews
Sensitivity Analysis
Decision Tree Analysis
Simulation
Monte Carlo Analysis

24

Communications

Communication
Channels
=
n * (n-1) / 2
Leverage Blueprint - PMP Study Notes & Formula Guide

25

Probability

EMV = Probability *
Impact in currency
Leverage Blueprint - PMP Study Notes & Formula Guide

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Rules Based on Numbers

80 Hour Rule = Max size
of work packages

80/20 Rule = Paretos

Law
20% of causes responsible for
80% of problems

0/50/100 = Work
package completion
No credit until 50% complete
No additional credit until
100% complete

Leverage Blueprint - PMP Study Notes & Formula Guide

27

Contact Details

Leverage Blueprint - PMP Study Notes &

Formula Guide

28

Contact Detail
Postal
P.O. Box CT 6440, Cantonments Accra, Ghana

Telephone
233 (0) 200 116 119

Email
blueprint@leverage-blueprint.com

Website
www.leverage-blueprint.com

Skype
leverage.blueprint

Facebook
www.facebook.com/leverage.blueprint.com

Twitter
www.twitter.com/levBlueprint
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29