Formulas

Present Value

PV=FV/(1+r)^n OR FV=PV(1+r)^n

Higher is better. FV= Future Value, R= interest rate, n= no. of time periods

PERT (Program Evaluation and Review Technique): Title 3 Point estimate Beta distribution 3 point estimate- Triangular distribution Standard deviation of an activity (SD) Variance of an activity Standard deviation of the project Earned Value Techniques: Title Cost Variance (CV) Schedule Variance (SV) Est. At Completion (EAC) Formula CV = EV AC SV = EV PV EAC = BAC/CPI EAC = AC + Bottom up EAC = AC + (BAC-EV) EAC = AC + [(BACEV)/CPI*SPI] Est. To Complete (ETC) ETC = EAC AC Notes Minus is over budget Minus is behind schedule Same rate of spending Use when Initial Estimates are flawed and no longer valid Use when future variances are atypical Considering SPI and CPI which influences remaining work Formula Expected duration=(P+4M+O)/6 Expected duration= (P+M+O)/3 (P-O)/6 (SD)^2 Sqroot(Sum of all activity variances) Notes P: Pessimistic M: Most Likely O: Optimistic

Var. At Completion (VAC) Schedule Performance Index (SPI) Cost performance index (CPI) To Complete Performance Index (TCPI)

VAC = BAC EAC SPI = EV / PV CPI = EV / AC TCPI = ( BAC - EV ) / ( BAC - AC )

TCPI = ( BAC - EV ) / ( EAC - AC )

Less than 1 is behind schedule Less than 1 is over budget For Managing to budget. Values for the TCPI index of less than 1.0 is good because it indicates the efficiency to complete as less than planned. How efficient must the project team be to complete the remaining work with the remaining money. For managing to specified value(EAC)

Calculating Slack or Float: Title Total Float Formula LS ES Or LF-EF Notes LS=Late Start, ES= Early Start LF=Late Finish, LS= Late Start

Communications Title Communication Channel Point of Total Assumption (PTA) Formula n(n-1)/2 For the FP contract

((Ceiling Price - Target Price)/buyer's ratio)+Target Cost