Communication Channel

Communication Channel = n (n – 1) / 2

Earned Value
Earned Value = % complete × Budget at Completion (BAC)

Cost Variance
Cost Variance (CV) = Earned Value (EV) – Actual Cost (AC)

Schedule Variance
Schedule Variance = Earned Value (EV) – Planned value (PV)

Cost Performance Index

Cost Performance Index (CPI) = EV / AC
If CPI = 1, then it means that you are getting $1 for every $1 spent.
If CPI > 1, then it means that you are getting more than $1 for every $1 spent.

Schedule Performance Index

Schedule Performance Index = Earned Value (EV) / Planned Value (PV)
It indicates the % of work completed nothing else.

Estimate at Completion (EAC)

Estimate at Completion (EAC) = BAC / CPI
Estimate at Completion (EAC) = AC + Bottom-up ETC
Estimate at Completion = Money spent to date + Budgeted cost for the remaining
work
Estimate at Completion (EAC) = AC + (BAC – EV)
Estimate at Completion (EAC) = AC + [(BAC – EV) / (CPI × SPI)]

Surender Kumar, PMP. https://www.linkedin.com/in/Surender-Kumar-/

Variance at Completion (VAC)
Variance at Completion (VAC) = BAC – EAC

Estimate to Complete (ETC)

Estimate to Complete (ETC) = EAC – AC

To Complete Performance Index

Here are two formulas to calculate TCPI depending upon BAC or EAC is given.
TCPI = (BAC – EV) / (EAC – AC)
TCPI = (BAC – EV) / (BAC – AC)

Standard Deviation (SD)

σ = (Pessimistic – Optimistic) / 6
Variance= σ ^2

On a critical path σ= sqrt of sum of sqrs of individual deviations

PERT Formula for estimates
Triangle = (P + M + O) / 3
Beta = (P + 4M + O) / 6

Control limits- 3 sigma on each side

2Sigma=95.45%. 3Sigma=99.73%. 6Sigma=99.99%>>> 3.4 defects per million.

Risk Priority Number (RPN)

The Risk Priority Number (RPN) is all about assessing the risks in the Failure Mode
and Effect Analysis (FMEA) and therefore helps in sorting the risks. To calculate
RPN, detection, occurrence, and severity is taken into consideration, so let’s
understand these terms first.
Detection:It is related to the capability of detecting the failure and is ranked from
1 to 10. Low rank of detection represents the high capability of detection.
Occurrence:It is related to the potential of failure occurrence and is ranked from 1
to 10. Low occurrence rank represents the low failure occurrence potential. The
term occurrence is also known as the time frame.

Surender Kumar, PMP. https://www.linkedin.com/in/Surender-Kumar-/

Severity:It is related to the severity of the failure mode and is ranked from 1 to
10. Highly severed risks are given the higher severity. The term severity is also
known as impact.
RPN = Detection * Occurrence * Severity

Return on Investment
As the name suggests, it is the measurement of profit or loss gained through an
investment based on the formula for calculating ROI is –
ROI = (Net Profit / Cost of Investment) * 100

Payback Period
The formula for calculating the PayBack Period is
Payback Period = Initial Investment / Periodic Cash Flow

Cost-Benefit Ratio (CBR)

CBR = Net Present Value of Investment / initial investment cost

Present Value (PV)

PV = FV / (1 + i)^n

Target Price
Target Price = Target Cost + Target fee

Point of Total Assumption (PTA)

This concept is associated with fixed price incentive fee contracts. It is the amount
above which all the losses of extra cost overrun are accepted by the seller.
PTA = [(Ceiling Price – Target Price) / Buyer’s Share Ratio] + Target Cost

Depreciation Expense= Asset cost/useful life

Book Value= Book value at beginning- Depreciation
Depreciation rate= 100%/useful life
ROM- -25% to +75%

Surender Kumar, PMP. https://www.linkedin.com/in/Surender-Kumar-/