Earned Value Management

EV = BAC * % complete
EV = PV * % complete (any point during project execution)
EV=BCWP (budgeted cost of work performed)
PV=BCWS (budgeted cost of work scheduled)
AC=ACWP (actual cost of work performed)
SV = EV-PV > 0 is good
SPI = EV/PV > 1 is ahead of schedule
CV = EV-AC > 0 is good
CPI = EV/AC > 1 is under budget
PV = SV/(SPI-1)
AC = CV/(CPI-1)

EAC = AC+bottom-up ETC : when initial estimates are flawed
EAC = AC+(BAC-EV) : when ETC is predicted to be done at budgeted rate (ATYPICAL)
EAC = BAC/CPI : when ETC is expected at current CPI (typical)
EAC = AC+(BAC-EV)/(SPI*CPI) : at current SPI, CPI
EAC=BAC-CV ?
EAC = AC/%Complete
ETC = EAC AC :assuming work goes as per plan
ETC = BAC EV
VAC = BAC EAC
%VAC = VAC/BAC * 100
TCPI = (BAC-EV)/(BAC-AC) : accepting BAC value
TCPI = work remaining/funds remaining
TCPI = (BAC-EV)/(EAC-AC) : when BAC is not sufficient and EAC is calculated
TCPI > 1 is bad
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Expected Monitory value: EMV=Impact*Probability
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Communication channels = N*(N-1)/2
7% of communication message is contained in words
38% in vocal pitch
55% in body language
Albert Mehrabians book Silent Message
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TEAM stages Tuckman (Jensen) Ladder
forming
storming
norming
performing
adjourning
Future value & Present value
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FV = PV (1+r)^N : r=rate of interest, N=number of time periods
PV = FV/(1+r)^N
NPV : higher the better
NPV > 0 investment will add value, accept the project
Internal rate of return, IRR : Bigger the better
Benefit Cost Ration, BCR : Bigger the better
Payback period: Lesser the better : This is nothing but Breakeven period
Payback period=Net investment/Avg annual cash flow
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Probability distribution

PERT: Normal: (O+M*4+P)/6
Triangular: (O+M+P)/3
SD of activity = (P-O)/6
Variance of activity = [SD]squared
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Float/Slack/total slack = LS-ES = LF-EF : =0 for activities on critical path
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Cost Of Quality, COQ = EFTW+COPQ = POC+PONC
Essential first time work
Cost of poor quality
Price of Conformance
Price of non-conformance
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Depreciation/Straight-line depreciation = Asset cost/Useful life
Double declining balance = 2x((Asset cost Accumulated depreciation)/Useful life)
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Rough Order of Magnitude (ROM) -25% to +75%
Budget Estimate -10% to +25%
DefinitiveEstimates -5% to +10%
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Remember, RETURN = Net Income Before Tax (NIBT) *or* Net Income After Tax
(NIAT); & ON means /
Return on Sales, ROS = NI*T/Total Sales
Return on Assets, ROA = NI*T/Total Assets
Retrun on Investment, ROI = NI*T/Total Investment
Working Capital = Current Assets Current Liabilities
Discounted cashflow = Cashflow * Discount factor
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Contract related formulas
-
Savings = Target cost Actual cost
Bonus = Savings*Percentage
Contract cost = Bonus+Fees
Total cost = Actual cost + Contract cost
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Point of total assumption
PTA = [(Ceiling Price - Target Price)/Buyer's Share Ratio] + Target Cost
Cost to buy = Initial cost + [#months * (monthly maintenance costs)]
lifecycle cost = total cost + maintenance and support cost for lifetime of product
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Normal Distribution
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1 sigma = 68.26%
2 sigma = 95.46%
3 sigma = 99.73%
6 sigma = 99.999%
1 SD = 1 sigma
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What Five Strategic Considerations may result in authorization of a project?
(MOCkTaiLS MOCTLS)
Market demand
Organizational need
Customer request
Technological advances
Legal requirements
Social need
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EVA = Net Operating Profit After Tax Cost of Capital (Revenue Op. Exp Taxes)
(Investment Capital X % Cost of Capital)
EVA: Economic Value Add Benefit Measurement Bigger is better
Source Selection = (Weightage X Price) + (Weightage X Quality)
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Types of powers of PM:
Legitimate
Reward
Expert
Referent
Coersive/Punishment
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Motivational theories

Hertzbergs highgyene-motivation
Maslows hierarchy of needs
McGregor Theory X, Y; / Z(assurance of permanent job position)
McClellands Need Theory
Victor Vroom Expectance theory

Peter Principle=Halo effect

range of variance on a budgetary estimate can be from -10% to +25%.

Paul Hersey/Ken blanchards Situational continuum/leadership
change leadership style based on maturity of subbordinates/team.
S1: Telling; S2: Selling; S3: Participating; S4: Delegating;
system testing vs integration testing
Seven Quality Mgmt and Control tools(NP, MAP IT)

Network diagram
PDPC
Matrix diagram
Affinity diagram
Prioritization Metrics
Interrelationship digraphs
Tree diagram
7 Basic Quality Tools (See See See, Husband and Father Playing Soccer)

Check sheet
Control chart
Cause-and-effect diagram
Histogram
Flow chart
Pareto chart
Scatter diagram
type II error beta risk
ACTIVITY ON ARROW/arrow diagramming method
McKinseys 7Ss - Robert H. Waterman, Jr. and Tom Peters
Hard Elements
Strategy
Structure
Systems
Soft Elements
Shared Values
Skills
Style
Staff
7 reasons of conflicts on projects
-
schedule
project priorities
human resources
technical opinions and performance trade-offs
administrative procedures
persnality conflict
cost and budget
Conflict management style
-
withdraw/avoid
compromise
smoothen/accomodate
collaborating
confront/problem solving
force
Collaborating: win/win;
Compromising: win some/lose some; >> lose/lose
Accommodating: lose/win;
Competing: win/lose;
Avoiding: no winners/no losers
Test of Normality
Paired Comparison Analysis
opm3
managemet by objective
capability maturity model
tqm
Merrill and Reid in their employee motivation theory?
personality traits: driver, expressive, amiable, and analytical.
Joseph Juran:applied the Pareto principle to quality issues
Jurans Trilogy: quality planning, quality control, and quality improvement.
W. Edwards Deming
PDCA along with Shewart
Philips Crosby DIRFT (4 principles)
The definition of quality is conformance to requirements (requirements meaning both
the product and the customers requirements)
The system of quality is prevention
The performance standard is zero defects (relative to requirements)
The measurement of quality is the price of nonconformance
Vilfredo Federico Damaso Pareto
80-20 principle
Kaoru Ishikawa
root-cause diagram: fishbone
KJ Diagram ()
William Ouchi (jap)
Theory Z, permament job offer
Genichi Taguchi
Design of experiments
F.C. Moore
Delegation means assigning work to the others and giving them authority to do so
Overlapping relationship
Sequential relationship
Multi-phase relationship
Iterative relationship
Predictive/plan-driven
Iterative and Incremental
Adaptive/Agile
NPV is defined as: The difference between the present value of cash inflows and the
present value of cash outflows.
critical chain methd by Eliyahu M. Goldratt
The critical path method (CPM) is a project modeling technique developed in the late
1950s by Morgan R. Walker (of DuPont) and James E. Kelley
Parkinsons law is the adage which states that work expands so as to fill the time
available for its completion.
Students syndrom work is done at the last moment before deadline
Group decision making criteria (BINAM)

Brainstorming
Idea/mind mapping
Nominal technique
Affinity diagrams
Multi-criteria decision analysis
Failure mode and effect analysis FMEA
QFD quality function deployment (type of Facilitated workshops)
Discrete, Apportioned, Level of Effort EMV effort types
marginal analysis
lifecycle costing
demings 14 points?
ARMA>
zero sum processing
issue log
shannon-weaver model of communication
code of ethics: Respect, Responsibility, Honesty, Fairness >>>> Aspirational and
Mandatory
direct, indirect, fixed, variable costs

Thats about it. It may look a long one, but when you write one for yourself it certainly
doesnt feel long. And moreover you write even tersely on paper. The only thing to keep
in mind is to practice the brain-dump couple of times daily in the last week leading up to
your actual PMP exam. The more you practice, the easier it is to write on paper in
shortest time, and more confident you will feel during the exam!
So, thats a secret to feel good and do good during the exam!
If you need any help with your PMP preparation do not hesitate to write to me at shiv-at-
pmexamsmartnotes-dot-com