Formulas Flashcards

1
Q

EV (Earned value)

A

Formula: BCWP
Budgeted cost of work performed
*This is the percent complete multiplied by the BAC.
If a project has a budget of $100,000 and the work completed to date represents 25% of the entire project work, its EV is $25,000

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2
Q

PV (Planned value)

A

Formula: BCWS
Budgeted cost of work scheduled. Someone always has to tell you where you are in the project.
i.e. If a project has a budget of $100,000 and month six represents 50% of the project work, its PV for month six is $50,000

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3
Q

AC (Actual cost)

A
Formula: AC 
Actual cost of work performed 
This is usually given in the problem.
i.e. If a project has a budget of $100,000
and $35,000 has been spent on the
project to date, the AC is $35,000.
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4
Q

SV (Schedule variance)

A

Formula: SV = EV – PV SV
occurs when the EV is more or less than the PV. When you earn less than planned, you are behind schedule.
*Variance is something minus something.
i.e. If a project is supposed to be worth
$75,000 in month six; however, at
month six your EV is only $45,000.
Your SV is $30,000.

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5
Q

CV (Cost variance)

A

Formula: CV = EV – AC CV
occurs when the actual cost of the project is more or less than the EV. When you have
earned more than the actual cost of the work, you have cost underrun. This is a good position to be in.
*Variance is something minus something – EV always comes first.
i.e. If a project has an EV of $25,000,
but your AC is $35,000, you have a
cost overrun of $10,000, which is
not a good position.

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6
Q

BAC (Budget at

completion)

A

Formula: BAC
Usually given in the
problem.

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7
Q

CPI (Cost performance index)

A
Formula:  CPI = EV / AC 
*Index is something divided by something.
CPI is a reflection of the amount
of actual cumulative dollars
spent on a project’s work and
how close that value is to the
predicted budgeted amount.
CPI < 1, cost overrun
CPI = 1, on budget
Index is something
divided by
something.
If a project has a budget at completion (BAC) of $209,000, and to date the project has spent $35,500 on actual costs (AC). Based on the percentage of the completed project, which is 15%, the earned value (EV)
is $31,350. The planned value (PV)
is $36,000. Dividing the EV, 
CPI > 1, cost underrun
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8
Q

SPI (Schedule performance index)

A
Formula: SPI = EV / PV
*Schedule always uses planned value. Costs are always actual costs. SPI calculates the ratio of actual work performed versus the work planned.
SPI < 1, not good, behind
schedule
SPI = 1, project on schedule, at
project completion
SPI > 1, ahead of schedule
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9
Q

TCPI (To-Complete performance index)

A

Formula: (BAC) TCPI = (BAC – EV) /(BAC – AC)
*What’s left to do divided by what’s left.
TCPI forecasts the likelihood that a project will achieve its goals given what’s happening in the project right now.
TCPI < 1, more likely to meet
BAC or EAC, on target
TCPI = 1, on target
TCPI > 1, more likely to be off target

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10
Q

TCPI (EAC)

A

Formula: TCPI = (BAC – EV) /(EAC – AC)
*What’s left to do divided by the predicted amount of cash left.
TCPI forecasts the likelihood that a project will achieve its goals given what’s happening in the project right now.
TCPI < 1, more likely to meet
BAC or EAC, on target
TCPI = 1, on target
TCPI > 1, more likely to be off target

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11
Q

EAC (Estimate at completion)

A

Formula: EAC = AC + ETC~ or ~EAC = BAC /CPI

*Account for pennies lost on the dollar.

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12
Q

ETC (Estimate to complete)

A

Formula: ETC = EAC – AC

*How much more do you need?

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13
Q

VAC (Variance at completion)

A

Formula: VAC = BAC – EAC
*How far is the project likely to be
upside-down?

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14
Q

NCC (Number of communication channels)

A

Formula: NCC = n(n – 1) / 2

*n = total number of stakeholders

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15
Q

PV (Present value of money)

A
Formula: PV = FV / (1 + i)
PV = present value of money
FV = future value of money
i = interest rate
n = number of time periods 
*To determine the present value of a
future amount, you have to divide.
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16
Q

FV (Future value of money)

A
Formula": FV = PV * (1 + i)
FV = future value of money
PV = present value of money
i = interest rate
n = number of time periods
17
Q

NPV (Net present value)

A
  1. Calculate the project’s cash flow per time unit.
  2. Calculate each time unit total into the present value (PV).
  3. Sum the PV of each time unit.
  4. Subtract the investment for the project.
  5. Examine the NPV value.
    NPV < 0, bad – reject project
    NPV > 0, good – accept project
18
Q

BCR (Benefit cost ratio)

A

Benefit = revenues or paybacks (does not
include profits)
Project with higher BCR is selected. Watch out for ratios; convert to decimal point before deciding

19
Q

Standard deviation for an activity

A
σ = (P – O) / 6
P = Pessimistic estimate
O = Optimistic estimate
20
Q

Standard deviation for the project

A

σ

21
Q

Standard deviation for the project

A

σ

22
Q

Quality control

A
1σ = 68.27%
2σ = 95.45%
3σ = 99.73%
6σ = 99.99966%
23
Q

PERT

A

formula PERT = (P + 4*ML + O) / 6
ML = Most likely outcome
P = Pessimistic estimate
O = Optimistic estimate