The Most Important Equations in Cost Management in PMP & in PMI-ACP Exams

Cost Variance (CV)	CV = EV – AC EV = Earned Value AC = Actual Cost	< 0    Over budget = 0    On budget > 0    Within budget
Schedule Variance (SV)	SV = EV – PV EV = Earned Value PV = Planned Value	< 0    Behind schedule = 0    On schedule > 0    Ahead of schedule
Cost Performance Index (CPI)	CPI = EV/AC EV = Earned Value AC = Actual Cost	< 1    Over budget = 1    On budget > 1    Under budget sometimes the term ‘cumulative CPI’ would be shown, which actually is the CPI up to that moment
Schedule Performance Index (SPI)	SPI = EV/PV EV = Earned Value PV = Planned Value	< 1    behind schedule = 1    on schedule > 1    ahead of schedule
Estimate at Completion (EAC) if original is flawed	EAC = AC + New ETC AC = Actual Cost New ETC = New Estimate to Completion	if the original estimate is based on wrong data/assumptions or circumstances have changed
Estimate at Completion (EAC) if BAC remains the same	EAC = AC + BAC – EV AC = Actual Cost BAC = Budget at completion EV = Earned Value	the variance is caused by a one-time event and is not likely to happen again
Estimate at Completion (EAC) if CPI remains the same	EAC = BAC/CPI BAC = Budget at completion CPI = Cost performance index	if the CPI would remain the same till end of project, i.e. the original estimation is not accurate
Estimate at Completion (EAC) if substandard performance continues	EAC = AC + [(BAC -EV)/(CPI*SPI)] AC = Actual Cost BAC = Budget at completion EV = Earned Value CPI = Cost Performance Index SPI = Schedule Performance Index	use when the question gives all the values (AC, BAC, EV, CPI and SPI), otherwise, this formula is not likely to be used
To-Complete Performance Index (TCPI)	TCPI = (BAC –EV)/ (BAC – AC) BAC = Budget at completion EV = Earned value AC = Actual Cost TCPI = Remaining Work /Remaining Funds BAC = Budget at completion EV = Earned value CPI = Cost performance index	< 1    Under budget = 1    On budget > 1    Over budget
Estimate to Completion	ETC = EAC -AC EAC = Estimate at Completion AC = Actual Cost
Variance at Completion	VAC = BAC – EAC BAC = Budget at completion EAC = Estimate at Completion	< 0    Over budget = 0    On budget > 0    Under budget
PERT Estimation (3 Points Estimate)	(O + 4M + P)/6 O= Optimistic estimate M= Most Likely estimate P= Pessimistic estimate
Standard Deviation	(P – O)/6 O= Optimistic estimate P= Pessimistic estimate	this is a rough estimate for the standard deviation
Float/Slack	LS – ES LS = Late start ES = Early start LF – EF LF = Late finish EF = Early finish	= 0    On critical path < 0    Behind schedule

Communication Channels

n (n-1)/2 n = number of members in the team

n should include the project manager e.g. if the no. of team members increase from 4 to 5, the increase in communication channels: 5(5-1)/2 – 4(4-1)/2 = 4

One Point Estimate

(O + M + P)/3 O= Optimistic estimate M= Most Likely estimate P= Pessimistic estimate

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Most Repetitive Questions in PMP Exam- Guarantee up to 36 marks out of 200 if you got these points

PMP Repetitive and Usual Questions- Guarantee up to 36 marks out of 200 if you got 
these points

PMI is using a bank questions for their exams, it is impossible to find the same description for a question in a PMI exam to be repeated in another exam, but the same idea, meaning and point of view is usually repeated, if you understand and considered the below points you will got up to 30 correct point in your exam.

1.   Delphi technique; the experts judgment- Always there is a direct question on it (1 Point)

2.   Characteristics of the project, has a start and end, and specific goals- always there is 1 direct question on the project characteristics (1 Point)

3.   Input, Tools & Techniques, Output,, there are about 7-10 questions asking to extract which one of the choices is or isn’t an input, output, T&T (9 Points)

4.   Expected Monetary Value (EMV) and Communication channels n*(n-1)/2, there is usually 2 questions about them in the exam (2 Points)

5.    Cost analysis equations EV, SPI, CPI, TCPI… etc. and usually you 
will face an average of 4 questions about this topic (4 Points)

 visit the link below to know all of the equations & formulas that is main to 
memorize before registering to PMP exam

http://academyoflions.blogspot.com/2018/07/main-formulas-you-have-to-memorize-to.html

6.   Differences between Cost plus, fixed price, T&M contracts and come as questions asking you to select the right or the wrong choice about the major differences between the contract types (3 Points)

7.    Code of ethics and professional behavior, and usually you will find 1 direct question about this topic regarding the manners and behavior of the project manager but you will see many choices in other questions show these behaviors (1 Point)

8.   Project Scope Statement, Scope of Work, WBS, WBS dictionary and project constraints, two direct questions about them can be detected in your exam (2 Points)

9.   The network diagram, calculating durations of activities, Early and late start, Early and late finish, Slag, critical and near critical path, crash and most risky activities, all of these topics will be covered in the exam 

(7 Points)

10. Monte Carlo Simulation which is usually 2 direct questions on it

see the link below for more information about Monte Carlo Simulation in PMP Exam

http://academyoflions.blogspot.com/2016/09/monte-carlo-simulation.html

11. which Process comes next?? just remember that Planning phase processes are coming as per their order, for the other processes such as Initiating , Monitoring & controlling, execution & closing, their processes are not necessary to be in order, just the planning processes  

&

you have to memorize them for the exam.

5 Points 

12. Tornado diagram, usually and at least there is 1 direct question about  it (1 Point)

Note that the most important factor during the PMP exam is the time, controlling the time and solving the questions based on strategic plan for you will let you finish on the right way.