Formulas

30 April 2018 07:00

Develop Schedule -
1. Parametric estimating Duration = (Quantity of work × Productivity rate) ÷ Number of resources used
2. Three-point estimating =
Record an optimistic estimate, Record a most likely estimate, Record a pessimistic estimate.
Assign weights to each estimate, where the most likely estimate gets a weight of 4 and the
optimistic and pessimistic estimates each get a weight of 1.
Multiply each estimate by its assigned weight, Total the weighted durations. Divide the sum
of the weighted durations by the sum of the weights

Control Schedule -
EVA (Earned Value Analysis)
Earned Value Management (EVM) helps project managers to measure project performance. It is a systematic project management process
used to find variances in projects based on the comparison of worked performed and work planned. EVM is used on the cost and schedule
control and can be very useful in project forecasting.

3. Schedule Variance = Earned Value (EV) - Planned Value (PV).

Earned Value = activity valued * actual %age completion
Planned Value = activity valued * planned %age completion
A negative schedule variance means the activity is behind schedule.

4. Schedule Performance Index (SPI) = EV / PV [If the earned value and planned values are equal, the project is on schedule and
the SPI is equal to 1]
SPI values of less than 1 show that the project is behind schedule and greater than 1 show that the project is ahead of schedule.

Estimate Cost -
1. Expected Cost [three-point estimating] = sum of optimistic estimate, four
times the most likely estimate, and pessimistic estimate whole divided by 6.

Control Cost -
1. Budget at Completion (BAC) = Total approved budget for the project
2. Actual cost (AC) = total cost actually incurred up to a specific time
3. Planned Value (PV) = BAC x ( Time passed / Total Schedule Time) % [%age of time actually completed]
4. Earned value (EV) = approved cost estimate [BAC] x %age of work actually completed
5. Cost Variance (CV) = EV - PV [Earned Value (less) Planned Value. ]
[Positive variance means your project is under budget. A negative variance means your project is over budget and No
variance means you are right on budget.]
6. Cost Performance Index (CPI) = EV / AC
[CPI value higher than 1 indicates that a project is earning more than is being spent (Under Budget). A value lower
than 1 indicates a cost overrun (Over Budget)]
7. Estimate at Completion (EAC) =
a. EAC = BAC / CPI [assume that the project will continue to perform to the end as it was performing until now.]
b. EAC = Actual Cost incurred for work completed + Estimate to Complete for the remaining work [Bottom-up]
[cost estimate was flawed and need to calculate the new cost estimate for the remaining project’s work]
c. EAC = AC + (BAC - CV) where CV = EV - PV, EV with %age work completed and PV with %age time completed
[you have deviated from your budget estimate; however, from now on you can complete the remaining work as
planned.]
(BAC - CV) - Remaining duration of the project, costs will be as budgeted
[AC+(BAC-EV)] - Budget value of work still to be completed
d. EAC = AC + (BAC - EV) / (CPI x SPI) [over budget, behind schedule, and the client is insisting you complete the project
on time. if you know cost variance is unlikely for the remainder of the project. poor cost performance to date, and a
fixed project deadline]
i. (BAC - EV) = Work Left
ii. (SPI x CPI) = Overall work performance
8. To-Complete Performance Index (TCPI) =
a. (BAC - EV) / (BAC - AC) [what cost performance has to be achieved on a remaining work.]
b. (BAC - EV) / (EAC - AC) [If taken corrective action by updating the cost baseline from the original BAC to EAC]

Control Quality

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Control Quality
Six Sigma Transfer Function: Y = f(x)
Output is Y.
Consider the x's to represent inputs. Y, or the output, depends on the quality of the inputs, or x

Plan Communication Management

The number of communications channels = N(N-1)/2 [Where N is the number of stakeholders. You always include yourself in the
total. So if you're a project manager working on a team with 6 other team members, N would equal 7.]
How do you calculate the difference in communication channels if your group size changes?
[New N(N-1)/2] - [Old N(N-1)/2] ---- Eg. N=9 vs 6: [9(9-1)/2] - [6(6-1)/2] = 36-15 = 21 [ 21 new channels as compared with old .
This same logic can be used whether your team gains or loses members.

Analyzing Risk
Risk Score = Probability x Impact

Responding to Risk
Expected Monetary Value, or EMV = probability x estimated impact in terms of cost or time

Perform Quantitative Risk Analysis:

Three Point Estimated Cost = Sum of (Estimated $ amount x Probability (that was assigned by the experts) )
PERT - Three-Point Estimate = [Count the Best Case Scenario + (4 x Most Likely Estimate) + Worst Case Scenario] / 6.
EMV (Expected Monetary Value) of Risk = Impact x Probability

Estimate Terms
Alternative Analysis: Refers - Compare different ways and determine the best possible option.
Bottom-up Estimating: Refers - break a project into its component pieces of work, and then estimate for each of the pieces.
Parametric Estimating: Refers to previous similar project estimates to get an idea for estimated needs for your current project. It's
important to remember, this is a great technique when you only have preliminary information, and need some quick, high level
estimates.
Analogous Estimating: Refers - Historical data combined with other variables such as project parameters to produce more detailed
estimates.

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