8 Common Formulas to Prepare before your PMP Exam

31-Oct-2020

Project Management is regarded as one of the most sought-after credentials that allow you to become certified with the Project management professional certification. The PMP qualification is a benchmark for the project managers and allows candidates a scope through which they are able to become competent Project Managers across several domains. Project managers are crucial for project development and therefore it is the most in-demand certification among the professionals who belong to IT. There is a huge monetary and time investment that goes with the Project Management Professional certification. The professionals must have a clear sense of what they are willing to give in order to get certified with PMP certification. 

The Project management professional certification is offered by the Project management institute (PMI) which is regarded as the governing body of PMP certification and has laid certain PMP certification requirements. If you are planning to get certified with the Project management professional certification then it is recommended to enrol for the PMP training that ensures learning in a more practical sense. Training allows candidates a scope through which they are able to learn new skills and techniques in the project management field. The PMP training focuses on creating a great outlook for the professionals who get a taste of the industry experience and hence are well qualified in implementing the PMP methodologies and practices that are widely utilised across the globe. 

 

The PMP certification costs are as follows;

  • For PMI Members $405

  • For non-PMI members $555

 

Also Read: Project Management Professional (PMP) Procedure, Costs and Other Related Attributes

 

How training really works and affects the growth in the Project Management Professional certification?

  • The training focuses on developing a clear understanding related to Project management methodologies and practices.

  • The training also imparts a heuristic approach towards learning the best practices in the project management domain that allow individuals a scope through which they are able to work with utmost competency and credibility.

  • The training classes are delivered by the trainers who are highly qualified and experienced to deliver top-notch learning to the candidates.

  • With the PMP certification training, the participants get a chance to get customised learning schedules that allow them to study and work hard for preparing for the Project management certification exam.

 

There are certain formulas that are highly utilized in the Project management professional domain. These formulas come handy while managing and handling complex projects. these formulas play an eminent role in the PMP examination as well. Knowledge regarding these formulas is best acquired from the Project Management Professional training classes that are delivered by experienced professionals. These are the most commonly used formulas and one must consider the same if they are planning for getting certified as a Project Manager. 

In this paper today, we are going to have a detailed look at the formulas that are highly used in the Project Management field. The paper will also provide tricks and tips through which professionals are able to utilise it in a great way and are able to qualify the Project management professional examination. 

 

What are the formulas related to project management that one needs to memorise?

For becoming a competent and proficient Project manager, one needs to have a clear perspective as far as Product development is concerned. There are certain formulas that play an imminent role in the entire Project management and thus one should be familiar with the same in order to qualify as Project management. The professionals must be sound in the formulas so that they are able to handle projects that are way more complex in nature and require expertise. The PMP online training focuses exactly on this.

Now there are zillions of formula that are available in the Project management field. However, memorizing all is a bridge too far. Therefore we have accumulated information here so that you are able to understand all the major one without banging your head against the wall. The trick is simple and the professionals will have a clear comprehension so that they are not only able to memorise it but at the same time they will be able to execute the formulas in the real-life scenario while dealing with complex and convoluted projects. 

 

Comprehension of cost management with the help of the PMP formulas

The Project Management professional formulas are highly useful in approaching projects that are complex and require extreme expertise in working towards it. In Project Management there are more than 25 formulas available for the use of the Project Managers. But in order to utilise it, one must first understand it and should know its appropriate application. The PMP formulas are also crucial from the examination point of view and take candidates one step closer to getting certified with the Project Management Professional qualification. 

All the certified professionals associated with us have formulated a list of top 8 formulas that are used extensively in the Project Management domain and hence are included here. We will also have a clear dissection of the included formulas to make things easier for you. So keep following until the very end and find for yourself. 

The most common formulas used in Project Management are as follows:

1

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

2

Schedule Variance (SV) = Earned Value (EV) – Planned Value (PV)

3

Cost Performance Index (CPI) = EV / AC

4

Schedule Performance Index (SPI) = EV / PV

5

EAC = AC + Bottom-up ETC

6

EAC = BAC / Cumulative CPI

7

EAC = AC + (BAC – EV)

8

EAC = AC + [BAC – EV / (Cumulative CPI ´ Cumulative SPI)]

These are some of the most and frequently used formulas in Project management and one must have these on their tips in order to qualify as a certified Project Manager. Let us now have a detailed view of the formulas that are mentioned above and we will try and understand how each works in Project management.

 

Formula one - Cost variance (CV) = Earned value (EV) - Actual cost (AC)

In this formula, one can easily find out the cost variance by comparing the Earned value and the actual cost. So here the earned value remains at the top when compared with the actual value. Using this, project managers are able to derive the value of cost variance, schedule variance, cost performance index and schedule performance index. 

Formula two - Scheduled variance (SV) = Earned value (EV) - Planned value (PV)

Use of this formula allows project managers to derive the actual cost with the earned value. This particular formula is best for checking the cost-related questions and queries. Furthermore, it also focuses on developing a schedule that would bring planned value into consideration along with the earned value. 

Formula three - Cost Performance Index (CPI) = Earned value (EV) / Actual value (AC)

Getting the Cost performance index plays an important role in the entire project development lifecycle. In order to solve questions that are centric on finding the value of the Cost Performance index, project managers can utilise this formula and could derive the value of CPI through dividing the Earned value (EV) from Actual value (AV). This formula has multiple applications in the project management domain and hence it is one of those formulas that one needs to have on their tips while going to take the Project management professional exam. 

Formula four - Scheduled Performance Index (SPI) = Earned value / Planned Value (PV)

The fourth formula is another important case when we are dealing with Project management. Through this formula, project managers are able to derive the scheduled performance index by dividing the Earned value from the planned value. Doing so will give you the Scheduled performance index. Earned value is pivotal to Project management and therefore all the formulas including EV must be learned by heart. This will accelerate your chances of qualifying the Project management certification with much ease. 

Formula five - EAC = AC + bottom-up ETC 

This formula deals with a basic conclusion that when the process in project management and development is nearing its end, it is the right time to consider and focus on the actual costs which ultimately rise and increase as we are nearing the result stage and are closer to obtaining the future value. So in case if you and the teams have flawed the initial estimate, then utilization of this formula will bring you at peace with the progress and you can process with a new plan in hand. Therefore, the execution of this plays an important role in the entire Project Management life cycle. 

Formula six - EAC = BAC / Cumulative CPI

This is yet another crucial formula that can shape your entire Project management career. The execution of this formula will allow you to derive the value of EAC. This however can only be achieved if you try and maintain a positive value of both CPI and SPI. It is not the trickiest but the maintenance of equilibrium is quite important and therefore it requires a certain level of practice and away with it. 

Formula seven - EAC = AC + (BAC - EV)

This particular formula deals with monetary aspects related to projects. For project managers, it is quite necessary to maintain a healthy graph as far as money is concerned. The calculations must be accurate and to the point in case of monetary expense and therefore this formula derived the value of a sustainable actual cost that can be utilised in cases that involve draining of resources on the project at hand. You can easily calculate the EAC by subtracting the value of BAC from EV and then adding up the result with AC. 

Formula eight - AC + [BAC - EV / (Cumulative CPI’ Cumulative SPI)]

Last but not the least, this eighth formula aims at delivering the value of AC which stands for actual cost and is indicative of the actual budget that remains after the completion of the entire process. This can also be used in order to get the performance level by looking at the budget graph and estimating what needs to be done in order to take the project to the finish line. So in order to have a successful and efficient execution of the projects, project managers must get accustomed to working with deriving the Actual cost. 


Be a part of the project management training online and get a practical experience related to the execution of the formulas mentioned above.

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