To get a high-paying job as a project manager, you would have to pass the PMP certification exam. The PMP or Project Management Professional can help organizations achieve the individual process. This is the exam that will create efficient business project managers who will become world leaders.
The PMP exam is an objective-based exam that consists of 200 questions. These questions must be answered within a time of 4 hours. Although it might seem easy, it is not that easy considering the difficulty level of the questions. It is a grueling exam and can make you sweat through its complex questions. The PMP exam has been considered as one of the most difficult exams regarding project management professionals. You can think of it as a tough entry-level exam that you need to clear to get employed as a business project manager.
There are many tips and suggestions regarding the PMP exam that you can find on the web. Though all of them might not be true, some of them are. Apart from going through the tips and suggestions, you need to memorize some PMP formulas that will help you in the exam.
Here are 25 PMP formulas that will help you pass the exam.
- Communication channel.
Communication channels are the routes through which information can be transmitted in an organization. The more the number of communication channels in an organization, the greater will be the chances of its success.
- Earned Value.
The earned value will help you assess the present state of a project. Through this formula, you will be able to determine the success of a project in the initial stages.
- Cost Variance.
Cost variance is the deflection of the actual cost form the pre-estimated budget that was prepared at the beginning of the project.
- Schedule Variance.
Schedule variance is different from cost variance. The schedule variance will help you find out the difference between the earlier planned value and the earned value.
- Cost Performance Index.
This is crucial for estimating the performance of a company. The cost performance index will help you measure the cost efficiency of a project in a better way.
- Schedule Performance Index.
The rate at which a project is progressing needs to be monitored. This can be done with the help of the Schedule Performance Index. It will help you identify whether a project is keeping up with the schedule or not.
- Estimate at completion.
The estimate at completion formula helps professionals figure out or estimate the time of completion of the project. It will also help you calculate the budgets of the project.
- Variance at completion.
The variance at completion formula helps companies figure out the differences or the variations that result when a project has been completed.
- Estimate to complete.
To receive extra inputs about the project, companies use the estimate to complete formula. It shows you the difference between the planned budget and the actual cost after completion.
- To complete the performance index.
To receive additional information on project performance, companies rely on finding out how much the project has been completed and to what extent. This is a reliable formula that can help an organization find out how much work is left to do.
- Standard deviation
The difference between the actual data from the calculated average is known as the standard deviation. It is denoted by sigma and can be calculated by finding the mean average.
- PERT formula Beta
It takes into account different aspects of the project, like the chances of failure and the chances of success. By combining these factors, it figures out how the project varies from its initial plans.
- Expected Monetary Value
The amount of profits that a project can earn is represented through this formula.
- Risk Priority Number
The Risk Priority Number will allow organizations to assess the number of risks that a project might have to face.
- Cost Plus Percentage of Cost
The total cost of the project added with the additional costs that might have to be borne is calculated using this formula.
- Cost Plus Fixed Fee Contract.
Like the previous formula, this one calculates the risks associated with the project that are not included when the seller doesn’t accept the risk reductions.
- Cost Plus Award Fee Contract.
The risk of a project is distributed between the seller and the stakeholders.
- Cost Plus Incentive Fee Contract.
This is an innovative formula in which buyers have to bear a part of the cost of the project.
- Return on Investment.
The total amount of return gained from the investment is calculated through this formula.
- Payback Period.
The time required for the investments to be fruitful is measured using this formula.
- Cost-Benefit Ratio.
The ratio between the total cost of the project to the benefits it provides is calculated through the cost-benefit ratio.
- Present Value
The current value of a project is determined by this formula.
- Future Value
The future worth of a project is calculated using this formula.
- Target Price
It is a total of the cost and the fee of the target.
- Point of Total Assumption.
It involves using a fixed-price method.
These were the 25 PMP formulas that you need to learn to have higher chances of success in the PMP examination.