# 5 Project Management Formulas PMP

Estimation in project management depends on which stage of the project. PMP has listed 6 different formulas and has earned value management formulas for tracking project progress.

# Formulas PMP List

The PMP© Examination has a lot of formula questions which can be relatively easy if you know all the PMP formulas. You have 15 mins to write down any study notes before the exam starts so it is a good opportunity to write out all the formulas and use them during the exam. Here is the index of all the calculation formulas you are expected to know in the PMP examination:

Number of Communication Channels

PERT Estimation

Standard Deviation

Earned Monetary Value

Float/Slack Calculation

Earned Value Management (I created a dedicated post just for these formulas)

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## Number of Communication Channels (PMP Formula)

Process Group: Project Communication Management

Purpose: This formula is used by project managers when determining the number of communication channels required to effectively communicate to all stakeholders.

Formula:

Where n = number of members in the team.

Tips of Exam: When counting how many people need to be communicated with in a project make sure to include the project manager.

Example Question: A project manager is analysing the communications requirements for a project. T here are six team members, four stakeholders, and two subcontractors. He needs to find the number of potential communication channels. How many channels are there?

1. 13
2. 55
3. 66
4. 78

Example Answer: [shc_shortcode class=”shc_mybox”](4) In this case it’s six team members, four stakeholders, two subcontractors…and don’t forget the project manager! That’s 6 + 4 + 2 + 1 = 13 people. The formula is n(n – 1) ÷ 2 = 13(12) ÷ 2 = 78.[/shc_shortcode]

## Estimating Formula PMP

### PERT Estimation

Process Group: Project Cost Management

Purpose: The PERT Three Point Estimate technique is a type of three point estimate.  The only difference is that it applies weighting so that the most-likely estimate is weighted 4 times more than the other two estimates (optimistic and pessimistic). This formula is most valuable in estimating time or cost of activities for projects that are especially unique, such as in research and development where there are many unknowns.

Formula:

Where….

P = Pessimistic Estimation

O = Optimistic Estimation

M = Most Likely

Example Question: You’re working on a IT project to setup a development environment, including designing and building a computer room, installing the operating systems and software, and performing a security evaluation. Your team comes up with a best-case scenario for the activity that involves ordering and installing the equipment. If everything goes perfectly, they feel it will take five weeks. However, they think it’s much more likely to take nine. A team member points out that on his last project, there was a major equipment delivery delay that cost the project an extra four weeks, and the rest of the team agrees that this is a possibility in a worst-case scenario. Use PERT analysis to calculate how long you should expect this activity to take.

1. 5 weeks
2. 9 weeks
3. 12 weeks
4. 13 weeks

Example Answer: [shc_shortcode class=”shc_mybox”](2)The optimistic estimate is 5 weeks, the most likely is 9 weeks, and the pessimistic is 13, so the three-point estimate is (5 + 4 × 9 + 13) ÷ 6 = 9 weeks.[/shc_shortcode]

### Standard Deviation

Process Group: Project Quality Management

Purpose: Standard deviation is a measure of precision, a smaller standard deviation higher precision.

Formula:

Where….

P = Pessimistic Estimation

O = Optimistic Estimation

Example Question: If a task has been estimated at O = 4 days, P = 9 days amd M = 7, what is the standard deviation?

1. 5/6 days
2. 83 days
3. 1/3 day
4. 1/2 day

Example Answer: [shc_shortcode class=”shc_mybox”](1) Using the formula (P-O)/6 this equates to 5/6, make sure not to get confused with PERT estimation.[/shc_shortcode]

### Earned Monetary Value Calculation

Process Group: Project Risk Management

Purpose: Under the assumption that those values are accurate this formula is used to select options among courses of action aka quantitatively prioritize a risk within a set of known risks.

Formula:

The sum added to calculate total.

Impact positive figure if positive impact!

Impact negative figure if positive impact!

Example Question: You’ve identified two risks and an opportunity for your project. Risk A has a probability of 35% and a cost of \$500. Risk B has a probability of 60% and a cost of \$750. Opportunity C has a probability of 10% and a value of \$1,000. What’s the total EMV of Risk A, Risk B, and Opportunity C?

Example Answer: [shc_shortcode class=”shc_mybox”]To calculate EMV, add up the individual probabilities multiplied by costs (negative) or values (positive). EMV = (.35 x -\$500) + (.60 x -\$750) + (.10 x \$1,000) = -\$525[/shc_shortcode]

### Float/Slack Calculation

Process Group: Project Time Management

Purpose: Under the assumption that those values are accurate this formula is used to select options among courses of action aka quantitatively prioritize a risk within a set of known risks.

Formula:

LS = Late start
ES = Early start

LF = Late finish
EF = Early finish

Exam Tip: Float is pretty easy to calculate once you have the Early Start, Early Finish, Late Start & Late Finish for activities. You can calculate these using the forward and backward pass. There is a very good explanation in the below video….

Example Question: Given this portion of the network diagram to the right, what’s the ES of activity F?

1. 9
2. 10
3. 12
4. 13

Example Answer: Calculating the early start (ES) of an activity isn’t hard. All you need to do is look at the early finish (EF) of the previous activity and add one. If there’s more than one predecessor, then you take the largest EF and add one. In this case, the predecessors to activity F are D, with an EF of 9, and E, with an EF of 12. So the ES of F is 12 + 1 = 13.

### Recommended PMP Study Blog Posts

I would also recommend reading the following articles if you are studying for the PMP exam

How to Avoid PMP Audit Case Study

Review of the Best PMP Course on Udemy 2020

PMP Estimation Formulas for Project Management

The 7 Deadly Types of PMP Questions

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