4 Earned Value
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Transcript of 4 Earned Value
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Steve Barron 20041
Earned Value
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Steve Barron 20042
Ex
pendit
ure
Time
Actual
Planned
Measuring Performance
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Steve Barron: Project Management (inPractice)3
Assigning Value
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Steve Barron: Project
Management (in Practice)4
50/50 technique
50% of planned value earned at start 50% of planned value earned at end
short duration activities (no more than 3reporting periods)
AgnnVu
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Steve Barron: Project
Management (in Practice)5
0/100 Technique
No value earned at start
100% of planned value earned at end activities that start and end in one reporting
period
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Steve Barron: Project
Management (in Practice)6
Milestones
%age of value assigned to achievement of
each milestone within activity activities having a duration of 3 or more
reporting periods
AgnnVu
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Steve Barron: Project
Management (in Practice)7
Percentage complete
estimate of work complete at point in time
longer duration activities - most easilyperformed in production environment
AgnnVu
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Steve Barron: Project
Management (in Practice)8
Level of effort
based on passage of time management & supervision activities
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Steve Barron 20049
Expenditure
Time
Planned Cost
Actual Cost
Earned Value
Earned Value (Completed Cost)
BCWS
ACWP
BCWP
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Steve Barron 200410
BCWS
Budgeted Cost for Work Scheduledi.e. planned budgetACWPActual Cost for Work Performedi.e. actual costs incurredBCWPBudgeted Cost for Work Performedi.e. Earned Value
Planned
Actual
Earned Value
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Steve Barron 200411
1 2 3 4 5 6 7
Activity1
Activity2
Activity3
Activity4
Activity5
Activity6
50/50
0/100
50/50
0/100
Milestones
0/100
M1
M2
M3
M4
M5M6
M7
M8
M9
M10
Consider this planned schedule
EVTechnique
3
4
3
2
58
3
8
8
4
Value of Milestone
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Steve Barron 200412
1 2 3 4 5 6 7
The Planned plot planned time and planned value
0
10
20
30
40
50
M1 3
M2 4
7
M3 3
M4 2
M5 5
10
17
M6 8
8
25
M7 8
M8 3
M9 4
15
40
M10 8
8
48
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Steve Barron 200413
1 2 3 4 5 6 7
Activity1
Activity2
Activity3
Activity4
Activity5
Activity6
50/50
0/100
50/50
0/100
Milestones
0/100
M1
M2
M3
M4
M5M6
M7
M8
M9
M10
EVTechnique
3
4
3
2
58 3
8
8
4
Value of Milestone
4
The actual events occurred as follows
M2 4
M33
3
M5
6
M64
On time!
M9
4
M10
10
7
Actual Valueof Milestone
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Steve Barron 200414
1 2 3 4 5 6 7
Activity1
Activity2
Activity3
Activity4
Activity5
Activity6
50/50
0/100
50/50
0/100
Milestones
0/100
M1
M2
M3
M4
M5M6
M7
M8
M9
M10
The actual events occurred as follows
EVTechnique
4
4
3
3
67
4
8
10
4
Actual Valueof Milestone
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Steve Barron 200415
7
17
25
40
48
1 2 3 4 5 6 7
The Actual plot actual time and actual value
0
10
20
30
40
50
M1 4
M3 3
7
M2 4
M4 3
7
14
M5 6
6
20
M6 7
M7 8
M8 4
19
39
M9 4
4
M1010
10
53
43
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Steve Barron 200416
Earned Value
Planned
Actual
Time Cost
Plan Plan
PlanActual
Actual Actual
Planned
Actual
Earned Value
Milestone: 1 2 3 4 5 6 7 8 9 10
Period 2 2 3 3 3 4 5 5 5 6 PlanValue 3 4 3 2 5 8 8 3 4 8 Plan EV
Period 2 3 2 3 4 5 5 5 6 7 Act EV
Value 4 4 3 3 6 7 8 4 4 10 Act
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Steve Barron 200417
1 2 3 4 5 6 7
The Earned Value plot actual time and planned value
0
10
20
30
40
50
M1 3
M3 3
6
M2 4
M4 2
6
12
M5 5
5
17
M6 8
M7 8
M8 3
19
36
M9 4
4
M10 8
8
48
40
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Steve Barron 200418
1 2 3 4 5 6 7
All three plots for milestones 1 - 10
0
10
20
30
40
50
EV
Planned
Actual
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Steve Barron 200419
Planned
Actual
Earned Value
EV - Actual = CV, Cost Variance
EV - Planned = SV, Schedule VarianceVariances of zero indicate the project is proceeding as plannedNegative variances are unfavourable
CV
SV
Variances
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Steve Barron 200420
Interpretation of VariancesCV SV Status
BCWP-ACWP BCWP-BCWS
Project:
-ve cost more
+ve overachieving
Spend:
ACWP>BCWP>BCWS overspent
Project:
-ve cost more
-ve underachieving
Spend:
BCWS>ACWP>BCWP overspent
Planned
Actual
EVCV
SV
CV
SV
Planned
Actual
EV
CV = Cost Variance SV = Schedule Variance
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Steve Barron 200421
CPI (Cost Performance Index) = BCWP / ACWP
SPI (Schedule Performance Index) = BCWP / BCWS
Indices greater than one are favourable
Planned
Actual
EV
Indices of Performance
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Steve Barron 200422
Estimate to Completion (EtC)
(BAC - EV) / CPIwhere BAC = Budget at Completion
CPI = Cost Performance Index (i.e. BCWP/ACWP)
Planned
Actual
EV
BAC
BAC - EV
1/CPI
Time nowCompletion
Prediction of projectexpenditure from nowto completionbased upon pastperformance
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Steve Barron 200423
Estimate at Completion
Actual + (BAC - EV) / CPIor Actual + EtC
where BAC = Budget at Completion
CPI = Cost Performance Index (i.e. EV/Actual)
EtC = Estimate to Completion
Planned
Actual
EV
BAC
BAC - BCWP
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Earned Value - Trends
Steve Barron 200424
Cost
Variance
positive
negative
variance
Management
Reserve
Schedule
Variance
In the early stages of the project, the Cost Variance is above theSchedule Variance, indicating that the project is overspent, but themain problem is that it is underachieveing. Management reserve hasbeen pumped into the project to help recover the schedule.
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Earned Value - Trends
Steve Barron 200425
Cost
Variance
positive
negative
variance
Management
Reserve
Schedule
Variance
As the project progresses and the schedule initially recovers, theCost Variance becomes more negative, indicating that costs aregoing out of control, even though more management reserve is beinginvested. Finally, the Schedule Variance falls lower still, indicatingmore delays and costs are drastically increasing.