7 Project Management Formulas and Quantitative Techniques Free Online FlashCards

How does parametric estimating calculate an estimate?

Parametric estimating applies a statistical rate to a quantity: $Estimate = rate \times quantity$.

What is the PERT expected-estimate formula?

The PERT expected estimate is $E = \frac{O+4M+P}{6}$, weighting the most likely estimate four times.

How do contingency and management reserves differ?

The cost baseline includes contingency reserve for identified risks. Management reserve covers in-scope work not yet specifically planned and is outside the cost baseline in common predictive-project terminology.

What does a negative cost variance indicate?

Cost variance is $CV = EV-AC$. A negative result means the project is over budget for the work performed.

Which EAC formula assumes current cost performance will continue?

If current cost performance is expected to continue, use $EAC = AC + \frac{BAC-EV}{CPI}$ to forecast total cost at completion.

How is TCPI calculated when the target is BAC?

To meet BAC, $TCPI = \frac{BAC-EV}{BAC-AC}$. It measures the cost efficiency required on the remaining work.

What determines a project’s critical path?

The critical path is the longest-duration path through a logically linked schedule network; it determines the earliest possible completion under the modeled logic and durations.

What does total float measure?

Total float is $LS-ES$ or $LF-EF$. It is how long an activity can slip without delaying modeled project completion.

How is expected monetary value calculated?

Expected monetary value is $EMV = \sum (probability\ of\ outcome \times monetary\ outcome)$. It is an average across possible outcomes, not a guaranteed result.

What does Monte Carlo simulation provide, and what limitation remains?

Monte Carlo simulation repeatedly samples uncertain inputs to produce a range or probability distribution of possible outcomes; it cannot make weak input data reliable.

How are PERT standard deviation and variance calculated?

PERT standard deviation is $\sigma = \frac{P-O}{6}$; its variance is $\sigma^2 = \left(\frac{P-O}{6}\right)^2$.

What does EVM schedule variance measure, and in what units?

Schedule variance is $SV = EV-PV$, expressed in value units, not calendar time.