PMP Study Notes Formula Guide

7/29/2019 PMP Study Notes Formula Guide

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Project Management Professional

(PMP)

PMP Study Notes & Formula Guide


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Knowledge Areas (9)

ProjectIntegration

Management

Project ScopeManagement

Project TimeManagement

Project CostManagement

Project QualityManagement

Project HumanResource

Management

ProjectCommunications

Management

Project RiskManagement

ProjectProcurementManagement

Leverage Blueprint - PMP Study Notes & Formula Guide 2


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Processes (5)

Initiation Planning Execution

Monitorand Control Closing



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Project Management Processes (42)

P

rojectIntegration

Management

Develop ProjectCharter

Develop ProjectManagement Plan

Direct / ManageProject Execution

Monitor / ControlProject Work

Perform IntegratedChange Control

Close Project orPhase



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Project

ScopeManagement

CollectRequirements

Define Scope

Create WBS

Verify Scope

Control Scope



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Projec

tTimeManagement

Define Activities

SequenceActivities

Estimate ActivityResources

Estimate ActivityDurations

Develop Schedule

Control Schedule



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ProjectCostManagement

Estimate Costs

Determine Budget

Control Costs



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ProjectQ

ualityManagement

Plan Quality

Perform QualityAssurance

Perform QualityControl



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ProjectHumanResource

M

anagement

Develop HumanResource Plan

Acquire ProjectTeam

Develop ProjectTeam

Manage ProjectTeam



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ProjectCommunications

Managemen

t

IdentifyStakeholders

PlanCommunications

DistributeInformation

Manage StakeholderExpectations

Report Performance



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ProjectRiskManag

ement

Plan RiskManagement

Identify Risks

Perform QualitativeRisk Analysis

Perform QuantitativeRisk Analysis

Plan Risk Responses

Monitor and ControlRisks



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ProjectProcure

ment

M

anagement

PlanProcurements

ConductProcurements

AdministerProcurements

CloseProcurements



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Network Diagram

Activity Duration = EF -ES + 1

orActivity Duration = LF -

LS + 1

Total Float = LS - ES orTotal Float = LF EF

Free Float = ES ofFollowing - ES ofPresent - DUR of

Present

EF = ES + duration - 1ES = EF of predecessor +

1LF = LS of successor - 1

LS = LF - duration + 1



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Project Selection

PV = FV / (1+r)^n FV = PV * (1+r)^nNPV = Formula not

required. Select biggestnumber.

ROI = Formula notrequired. Select biggest

number.

IRR = Formula notrequired. Select biggest

number.

Payback Period = Addup the projected cashinflow minus expenses

until you reach theinitial investment.

BCR = Benefit / Cost CBR = Cost / BenefitOpportunity Cost = Thevalue of the project not

chosen.



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Earned Value Management

BAC = Budget AtCompletion

EV = Actual % *BAC

PV = Planned % *BAC

AC = Sum of allincurred costs

CV = EV - AC SV = EV - PV

CPI = EV / AC

< 1 = Over Budget > 1 = Under Budget

SPI = EV / PV

< 1 = Behind Schedule > 1 = Ahead of

Schedule

EAC = BAC / CPI EAC = AC + ETCEAC = AC + (BAC +

EV) / CPIETC = EAC - AC

VAC = BAC - EAC BCWS = PV BCWP = EV ACWP = AC



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TIPS: Earned Value Management

Negative isbad

Positive isgood

If Variance: EV- Something

If Index: EV /Something

If Cost relateduse AC

If Time relateduse PV

Most formulasstart with EV



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PERT

PERT 3-point =(Pessimistic+(4*MostLikely)+Optimistic)/6

PERT = (Pessimistic -Optimistic) / 6

PERT Activity

Variance =((Pessimistic -

Optimistic) / 6)^2

PERT Variance all

activities =sum((Pessimistic -Optimistic) / 6)^2



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Values

1 sigma = 68.26% 2 sigma = 95.46% 3 sigma = 99.73%

6 sigma = 99.99%Control Limits = 3sigma from mean

Control Specifications= Defined by

customer; looser thanthe control limits

Order of Magnitudeestimate = -25% to

+75%

Preliminary estimate =-15% to + 50%



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Values

Budget estimate =-10% to +25%

Definitive estimate= -5% to +10%

Final estimate = 0%

Float on the criticalpath = 0 days

Pareto Diagram =80/20

Time a PM spendscommunicating =

90%

Crashing a project= Crash least

expensive tasks oncritical path.

JIT inventory = 0%(or very close to

0%.)

Minus 100 = (100)or -100



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Procurement

PTA = ((Ceiling Price

- Target Price) /Buyer's Share Ratio)

+ TargetCost



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Depreciation

Straight-line Depreciation:Depr. Expense = Asset Cost / Useful

LifeDepr. Rate = 100% / Useful Life

Double Declining Balance Method:Depr. Rate = 2 * (100% / Useful Life)

Depr. Expense = Depreciation Rate *Book Value at Beginning of Year

Book Value = Book Value at beginningof year - Depreciation Expense

Sum-of-Years' Digits Method:Sum of digits = Useful Life + (Useful

Life - 1) + (Useful Life - 2) + etc.

Depr. rate = fraction of years left andsum of the digits (i.e. 4/15th)



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Human Resource Management

Organizational Structures:

Functional, Matrix (weak,balanced, strong) , Projectized,Composite

Maslows Hierarchy ofNeeds:

Physiological, Safety, Social, Self-esteem, Self-actualization.

McGregor:

Theory X, Theory Y.

Ouchi:

Theory Z. Motivated bycommitment, opportunityadvancement.

Herzbergs Theory ofMotivation:

Hygiene factors, MotivatingAgents.

Leadership Styles:

Directing, Facilitating, Coaching,Supporting, Autocratic,Consultative, Consensus.

Project Manager Powers:

Formal (legitimate,) Reward,Penalty (coercive), Expert,Referent.

Conflict Management:

Withdraw (avoid), Smooth(accommodate), Compromise,Force, Collaborate, Confront(problem solving.)



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Quality Management

Ishikawa = FishboneDiagram: cause and

effect.

Pareto Diagram:Identify problems andfrequency. 80/20 Rule.

Flow Charts; ControlCharts.

Just in Time: Reducesinventory; requiresadditional quality

control.

Quality Theories: Kaizen(continuous

improvement,) SixSigma, TQM (total

quality management.)

Kaizen: Smallimprovements toreduce costs and

improve consistency.

Deming Cycle: Plan, DoCheck, Act



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Risk Management

Risk Strategies (threats):

Avoid

Transfer

Mitigate

Accept

Risk Strategies(opportunities):

Exploit

Share

Enhance

Accept

Qualitative Risk Analysis:Chance and impact of risk

occurrence Results in

prioritized list of risks; riskranking.

Quantitative Risk Analysis:

Numerical analysis ofprobability and impact.

Tools:

Interviews

Sensitivity Analysis

Decision Tree Analysis Simulation

Monte Carlo Analysis



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Communications

Communication

Channels=

n * (n-1) / 2



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Probability

EMV = Probability *Impact in currency



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Rules Based on Numbers

80 Hour Rule = Max sizeof work packages

80/20 Rule = ParetosLaw

20% of causes responsible for

80% of problems

0/50/100 = Workpackage completion

No credit until 50% complete

No additional credit until100% complete



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Contact Details

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Contact Detail

Postal P.O. Box CT 6440, Cantonments Accra, Ghana

Telephone 233 (0) 200 116 119

Email [email protected]

Website

www.leverage-blueprint.com

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leverage.blueprint

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Documents

PMP Study Notes Formula Guide