PMP Math- Flash Card

2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ 1

1
Project Selection
Earned Value
1
2
Topics
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ 2
Time Management
Communication
Procurement
3
4
5
2
Project Selection
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ %
&'()e tod'* o+ the +)t)re c',h +(ow - ,o i+ the mone* i,
coming '+ter . *e'r, we need to di,co)nt it to c'(c)('te the
/'()e o+ tod'*.
0re,ent &'()e 1 F& / 21 3 i45 n
Present Value
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ .
i 1 di,co)nt r'te
n 1 period
F& 1 F)t)re C',h In+(ow/ O)t+(ow
Net Present Value (NPV
N0& i, ' me',)re o+ how m)ch mone* ' pro6ect c'n
be e7pected to ret)rn 2in tod'*8, pre,ent /'()e4.
It8, ' 9)m o+ In+(ow 'nd o)t+(ow in pre,ent /'()e term
2me'n di,co)nted b',ed on d)r'tion 4
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ :
:
N0& 1 9)m2F& / 21 3 i45 n4
i 1 di,co)nt r'te
n 1 period
F& 1 F)t)re C',h In+(ow/ O)t+(ow
Net Present Value (NPV
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ ;
F& 1 F)t)re C',h In+(ow/ O)t+(ow
In+(ow repre,ented with 3 / O)t+(ow with Neg'ti/e
Net Present Value
Outflow 1000
USD (Now)
Outflow 1000
USD (Year 1)
Inflow 4000 USD
(Year 2)
Discount Rate = 10%
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ <
Discount Rate = 10%
NP = !1000!1000 "((1#10"100)$1)
# 4000"((1#10"100)$2)
= !1000 % &0& #''0(
= 1'&)
Net Present Value (NPV
Bigger i, better = B'd' >'i "o Beht'r
>'i ? B>"B>
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ @
@
NPV (Net Present Value
"ime /'()e o+ mone* t'Aen c're.
Bone* *o) get in : *e'r, i,n8t worth
', mone* *o) get tod'*
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ C
C
', mone* *o) get tod'*
!"ic" Project to Select#
0ro6ect # h', ' d)r'tion o+ . *e'r, 'nd 'n N0& o+ D.0-000-
0ro6ect B h', ' d)r'tion o+ % *e'r, 'nd 'n N0& o+ D.:-000-
0ro6ect C h', ' d)r'tion o+ ; *e'r, 'nd 'n N0& o+ D;2-000 Ehich
pro6ect wi(( *o) ,e(ectF
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ 10
1
0
"ime /'()e o+ mone* '(re'd* con,idered in N0& ,o
*e'r, doe,n8t m'tter
Gemember B>"B> ? Project C
IRR is a *easure of +ow ,uic-l. t+e *one.
in/este0 in a 1ro2ect will increase in /alue3 It4s
a rate of return w+ic+ calculate 5ase0 on
inflow an0 outflow of t+e 1ro2ect3
$nternal %ate o& %eturn ($%%
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ 11
H 6+e for*ula is sa*e li-e NP7 t+e 0ifference is now we nee0 to
calculate rate (i) w+ic+ e,uali8es t+e cas+ inflow an0 outflow
0 = Su*(9 " (1 # i)$ n)
i = IRR this is what we calculate
n = 1erio0
$%% ($nternal %ate o& %eturn
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ 12
$nternal %ate o& %eturn ($%%
Outflow 1000
USD (Now)
Outflow 1000
USD (Year 1)
Inflow 4000 USD
(Year 2)
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ 1%
0 = !1000!1000 "((1#i"100)$1)
# 4000"((1#i"100)$2)
If we 1ut i = :( 7 it *a-es t+e e,uation 5alance7 so
in t+is case IRR = :(%
$%%
Bigger i, better = B'd' >'i "o Beht'r
>'i ? B>"B>
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ 1.
1
.
$%% ($nternal %ate o& %eturn
Ehich 0ro6ect *o) wi(( ,e(ectF
Project Name $%% $n'estment
Io(d ;J .-:00-000
9i(/er :.@J 1-<00-000
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ 1:
1
:
Project (old 2B>"B> 4
9i(/er :.@J 1-<00-000
0('tin)m :.. J 2-000-000
Copper %J 1-000-000
NPV ) $%%
N0& repre,ent, the
pro6ect bene+it in
'b,o()te term (iAe
100-000 K9
IGG repre,ent the /'()e
in proportion (iAe 10J -
:;J
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ 1;
Ee c'n get contr'dictor* recommend'tion,
+rom N0& 'nd IGG b)t in e7'm *o) do not get
,)ch L)e,tion,
*ene&it Cost %atio
Bone* pro6ect going to m'Ae /er,),
it, co,t.
Bene+it/Co,t OG Ge/en)e/co,t
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ 1<
1
<
Bene+it/Co,t OG Ge/en)e/co,t
Gemember : Ge/en)e i, not eL)'(,
to 0ro+it
*C% (*ene&it Cost %atio
Ire'ter Bene+itM=NIre'ter G'tio M=N
Better pro6ect
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ 1@
1
@
H Co,t / Bene+it or 1 / Bene+it Co,t G'tio
Cost *ene&it ratio
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ 1C
*C% (*ene&it Cost %atio
!"ic" o& t"e &ollo+ing projects do ,ou select#
#4 0ro6ect Io(d with ' BCG o+ 0.C
B4 0ro6ect 9i(/er with ' CBG o+ 0.C 'nd co,t o+ D100-000
C4 0ro6ect i'mond with ' co,t o+ D100-000 'nd bene+it, o+ D110-000
4 0ro6ect 0('tin)m with ' BCG o+ 1.2
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ 20
2
0
'4 0.C b4 bcr 1 1/0.C 1 1.11 c4 11/10 1 1.1 d4 1.2
B>"B> -ns. /
Pa,0ac1 Period
"ime reL)ired to get origin'((*
in/e,ted 'mo)nt b'cA
9m'((er i, better . !'r(ier we get
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ 21
2
1
9m'((er i, better . !'r(ier we get
mone*- better it i,
Project Selection
/epreciation ? G'te 't which
pro6ect (o,,e, /'()e.
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ 22
2
2
/epreciation 2 Straig"t 3ine
"he ,'me 'mo)nt o+ depreci'tion t'Aen e'ch
*e'r
For ' comp'n* c'r th't h', ' pro6ected (i+e o+ : *e'r, which Oo)
p)rch',ed +or P1<-000 'nd *o) e7pect th't *o) wi(( be 'b(e to ,e((
the c'r 't the end o+ the : *e'r, +or P2-000. >ow m)ch i, the
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ 2%
2
%
the c'r 't the end o+ the : *e'r, +or P2-000. >ow m)ch i, the
,tr'ight (ine depreci'tion o+ thi, c'r in the %rd *e'rF
"ot'( to depreci'te 1 1<000 ? 2000 1 P1:-000
epreci'tion e'ch *e'r 1 1:000/: 1 P%-000
#n,: P%000- epreci'tion wi(( be ,'me e/er* *e'r
&'()e (e+t '+ter comp(etion o+ tot'( 'ge
Scrap Value
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ 2.
3i&e C,cle Cost
"ot'( (i+e time co,t o+ pro6ect
2e/e(opment 3 9)pport4- co,t +rom
,t'rt to end.
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ 2:
2
:
,t'rt to end.
Project Selection
4pportunit, Cost ? Bone* co)(d
h'/e been m'de b* pro6ect not
,e(ected o)t o+ 2 pro6ect,
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ 2;
2
;
,e(ected o)t o+ 2 pro6ect,
4pportunit, Cost
Eh't we (oo,e i, wh't we might
h'/e got
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ 2<
2
<
#mong C'db)r* 'nd Qit Q't- i+ we
choo,e C'db)r*- Qit Q't i, the
opport)nit* co,t . Iener'((* we wi((
e't both when it i, choco('te
Earned Value
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ 2@
H "echniL)e ),ed to me',)re how pro6ect i, doing
comp'red to p('n
H K,e, (ot o+ !& +orm)(',
Earned Value Management
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ 2C
H 0ro6ect: Chi(dren 0('* 're' in 'p'rtment comp(e7. "ot'(
mone* we h'/e i, ING :0-000. "ot'( d)r'tion i, ; month,.
"ot'( p('nned worA o+ 1000 ho)r,
Earned Value Management
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ %0
H Earned Value (EV ? B)dgeted co,t o+ worA per+ormed
H >ow m)ch worA w', 'ct)'((* comp(eted d)ring ' gi/en
period o+ time
Earned Value
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ %1
H !.g. +or %00 ho)r, o+ p('nned worA- te'm comp(eted %:0
'ct)'((*
!&J 1 %:0/1000 1 %:J
H !& 1 B#CR%:J 1 :0-000R0.%: 1 1<-:00
Earned Value
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ %2
H -ctual Cost (-C ? #ct)'( co,t o+ worA per+ormed
H #ct)'( mone* ,pent d)ring ' gi/en period o+ time. !.g.
'+ter %00 ho)r, o+ worA- ',,)me #C 1 1;-000
-ctual Cost
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ %%
H Sc"edule Variance (SV ? i++erence between where we
p('nned to be in the ,ched)(e 20&4 'nd where we 're in
the ,ched)(e 2!&4
Sc"edule Variance
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ %.
H 9& 1 !& ? 0& 1 1<:00 ? 1:000 1 2:00
H I+ we e'rned more or less th'n p('nned we 're h'/ing
,ched)(e /'ri'nce
Sc"edule Variance
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ %:
H 3/e 9& 'he'd o+ ,ched)(e 232:004
H =/e 9& behind ,ched)(e
H Bigger the /'()e- more the /'ri'nce
Sc"edule Variance
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ %;
H G'te 't which the pro6ect per+orm'nce i, meeting
,ched)(e e7pect'tion, d)ring ' gi/en period o+ time
Sc"edule Per&ormance $nde5 (SP$
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ %<
H 90I 1 !&/0&. 1<:00/1:000 1 1.1;
H I+ we e'rned more th'n p('nned we 're 'he'd
Sc"edule Per&ormance $nde5 (SP$
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ %@
H N 1 90I 'he'd o+ ,ched)(e 21.1;4
H M 1 90I behind ,ched)(e
H 1 1 90I on ,ched)(e
Sc"edule Per&ormance $nde5 (SP$
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ %C
H Cost Variance (CV ? i++erence between wh't we
e7pected to ,pend 2!&4 'nd wh't we 'ct)'((* ,pent 2#C4
Cost Variance
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ .0
H C& 1 !& ? #C 1 1<:-00 ? 1;00011:00
H I+ we e'rned more or (e,, th'n 'ct)'( mone* ,pent we
're h'/ing /'ri'nce
Cost Variance
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ .1
H 3/e C& Knder b)dget 231:004
H =/e C& O/er b)dget
H Bigger the /'()e- more the /'ri'nce
Cost Variance
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ .2
H G'te 't which the pro6ect per+orm'nce i, meeting co,t
e7pect'tion, d)ring ' gi/en period o+ time
Cost Per&ormance $nde5 (CP$
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ .%
H C0I 1 !&/#C. 1<:00/1;000 1 1.0C
H I+ we e'rned more th'n 'ct)'( ,pent we 're )nder b)dget
Cost Per&ormance $nde5 (CP$
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ ..
H N 1 C0I )nder b)dget 21.0C4
H M 1 C0I O/er b)dget
H 1 1 C0I on b)dget
Cost Per&ormance $nde5 (CP$
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ .:
H 0ro6ect, how m)ch more we wi(( ,pend on the pro6ect-
b',ed on p',t per+orm'nce
H !"C 1 !#C2!,tim'te 't Comp(etion4 = #C
Estimate to Complete (ETC
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ .;
H 0ro6ect, the tot'( co,t 't comp(etion b',ed on
per+orm'nce )p to ' point in time
Estimate at Completion (E-C
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ .<
H !#C 1 B#C/C0I 1 :0-000/1.0C 1 .:@<1
H Ehen /'ri'nce i, e7pected 't con,t'nt r'te 2C0I4 or
H "here i, no /'ri'nce 2C0I114
Estimate at Completion (E-C
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ .@
H !#C 1 #C3!"C2!,tim'te to Comp(ete4- when
H Origin'( e,tim'te not /i'b(e 'nd !"C c'(c)('ted +re,h(*
Estimate at Completion (E-C
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ .C
H !#C 1 #C32B#C=!&4- when
H C)rrent /'ri'nce, 're e7ception,- 't*pic'(- one time
/'ri'tion
Estimate at Completion (E-C
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ :0
H C)rrent /'ri'nce, 're e7ception,- 't*pic'(- one time
/'ri'tion
H !#C 1 #C32B#C=!&4
H !#C 1 1;00032:0000=1<:004 1 .@-:00
Estimate at Completion (E-C
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ :1
H !#C 1 #C32B#C=!&4/C0I- when
H C)rrent /'ri'nce, 're e7pected to rec)r- "*pic'(
Estimate at Completion (E-C
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ :2
H C)rrent /'ri'nce, 're e7pected to rec)r- "*pic'(
H !#C 1 #C32B#C=!&4/C0I
H !#C 1 1;00032:0000=1<:004/1.0C 1 .:@1;
Estimate at Completion (E-C
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ :%
H i++erence between wh't w', b)dgeted 'nd wh't wi((
'ct)'((* be ,pent
Variance at Completion (V-C
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ :.
H &#C 1 B#C ? !#C 1 :0000=.:@<1 1 .12C
Variance at Completion (V-C
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ ::
H 3/e /'()e me'n, p('nned i, more th'n 'ct)'(. 23.12C4
H =/e /'()e me'n, p('nned i, (e,, th'n 'ct)'(.
H Bigger the /'()e- more the /'ri'nce
Variance at Completion (V-C
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ :;
H To Complete Per&ormance $nde5 (TCP$2
H 0er+orm'nce th't m),t be 'chie/ed in order to meet
+in'nci'( or ,ched)(e go'(,
To Complete per&ormance $nde5 (TCP$
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ :<
H "C0I 1 2B#C ? !&4/2B#C ? #C4- when
H 0ro6ect i, on b)dget 'nd B#C i, /i'b(e
To Complete per&ormance $nde5 (TCP$
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ :@
H "C0I 1 2B#C ? !&4/2B#C ? #C4 1 :0000=1<:00/:0000=
1;000 1 0.C::
To Complete per&ormance $nde5 (TCP$
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ :C
H "C0I 1 2B#C ? !&4/2!#C ? #C4
H Ehen pro6ect e7pected to o/er/)nder b)dget 'nd B#C i,
no more /i'b(e
To Complete per&ormance $nde5 (TCP$
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ ;0
H "C0I 1 2B#C ? !&4/2!#C ? #C4 1 :0000=1<:00/.:@<1=
1;000 1 %2:00/2C@<1 1 1.0@@
To Complete per&ormance $nde5 (TCP$
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ ;1
Time Management
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ ;2
H 0ro6ect !/'()'tion Ge/iew "echniL)e 20!G"4 =
H Bo,t common techniL)e +or %=point e,tim'tion
H 9t'rt with % e,tim'te,- 0e,,imi,tic204- Optimi,tic2O4 'nd
Bo,t (iAe(*2B4
PE%T
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ ;%
H 0e,,imi,tic204 S Optimi,tic2O4're (e,, (iAe(* to h'ppen
there+ore norm'( e,tim'te 2B4 weight'ge i, . time,
H 03.B3O/;
PE%T
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ ;.
H 9t'nd'rd e/i'tion 294 o+ 0!G" 'cti/it* 1 0=O/;
PE%T
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ ;:
H &'ri'nce o+ ' 0!G" 'cti/it* |0=O/;|
PE%T
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ ;;
H F(o't/9('cA i, the time +or which the 'cti/it* c'n be
de('*ed be+ore de('*ing pro6ect
H F(o't 1 $'te 9t'rt ? !'r(* 9t'rt Or
H 1 $'te Fini,h ? !'r(* Fini,h
6loat
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ ;<
H 9tring o+ 'cti/itie, th't i+ 'dded +or it, d)r'tion i, (onger
th'n 'n* other p'th in n/w di'gr'm
Critical Pat"
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ ;@
H F(o't/9('cA i, the time +or which the 'cti/it* c'n be
de('*ed be+ore de('*ing pro6ect
H F(o't o+ 'n 'cti/it* on critic'( p'th i, Zero
Critical Pat"
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ ;C
Communication Management
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ <0
H N2N=14/2
H N 1 n)mber o+ peop(e
Communication C"annels
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ <1
H !.g.
H 0B h'/ing : te'm member,. >ow m'n* comm. Ch'nne(,
H N 1 ; 2:30B4- ;R:/2 1 1:
Communication C"annels
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ <2
H !.g.
H 0B h'/ing : te'm member,. I+ n)mber o+ te'm member,
red)ced to 2- how m'n* comm)nic'tion ch'nne(, (e+t
H O(d = N 1 ; 2:30B4- ;R:/2 1 1:
H New ? N1%- %R2/2 1 %
H i++erence 1:=% 1 12
Communication C"annels
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ <%
H i++erence 1:=% 1 12
H !.g.
H 0B h'/ing : te'm member,. I+ n)mber o+ te'm member,
red)ced to 2- how m'n* comm)nic'tion ch'nne(,
red)ced
H O(d: N 1 ; 2:30B4- ;R:/2 1 1:
Communication C"annels
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ <.
H New: N1%- %R2/2 1 %
H #n,: %
Procurement Management
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ <:
H Ge+er, to 'mo)nt 'bo/e which ,e((er be'r, '(( the (o,, o+
co,t o/err)n
H Co,t goe, 'bo/e 0"# 're ',,)med d)e to
mi,m'n'gement 'nd there+ore entit(ed to ,e((er
Point o& Total -ssumption (PT-
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ <;
H 0"# 1 "'rget Co,t 3 2Cei(ing 0rice ="'rget 0rice4/B)*er8,
,h're r'tio
Point o& Total -ssumption (PT-
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ <<
H B'Ae=or=B)* deci,ion 2'(,o c'((ed the o)t,o)rcing
deci,ion4 i, ' 6)dgment m'de b* m'n'gement whether to
m'Ae ' component intern'((* or b)* it +rom the m'rAet.
Ma1e or *u,
2012 iZenBridge | http://www.izenbridge.com/ | CONFI!N"I#$ <@