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1. Planned Value (PV)The Planned Value is the approved value of the work to be completed in a given time period;i.e. it is the money that you should have spent as per the schedule.

As per thePMBOK GuidePlanned Value (PV) is the authorized budget assigned to work to beaccomplished for an activity or WBS component. Total planned value for the project is alsoknown as Budget At Completion (BAC).

PV = (Planned % Complete) X (BAC)

Planned Value is also known as The Budgeted Cost of Work Scheduled (BCWS).

Let me explain with the help of an example.

You have a project to be completed in 12 months and the total cost of the project is $100,000.

Six months have passed and the schedule says that 50% of the work should be completed.

What is the Planned Value?

Let us see that what we have been given in this question-

Project duration 12 monthsProject Cost (BAC) $100,000Time elapsed 6 monthsPercent complete50% (as per the schedule)

The definition of Planned Value says that Planned Value is the value of the work that shouldhave been completed so far (as per the schedule).

Therefore, in this case we should have completed 50% of the total work.

Hence,

Planned Value = 50% of value of the total work

= 50% of BAC

= 50% of $100,000

= (50/100)X $100,000

= $50,000

Therefore, Planned Value (PV) is $50,000

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2. Earned Value (EV)The Earned Value is the value of the work actually completed to date; i.e. it is the value of theproject that you have earned so far.

As per the PMBOK Guide Earned Value (EV) is the value of work performed expressed interms of the approved budget assigned to that work for an activity or WBS Component.

Earned Value is also known as the Budgeted Cost of Work Performed (BCWP).

Example:

You have a project to be completed in 12 months and the total cost of the project is $100,000.Six months have passed and $60,000 is spent, but on closer review you find that only 40% of thework is completed so far.

What is the Earned Value (EV)?

From the above question you can clearly see that only 40% of the work is actually completed.

The definition of Earned Value says that it is the value of the project that has been earned.

In this case only 40% of the work has been completed.

Hence,

Earned Value is = 40% of value of total work

= 40 % of BAC

= 40% of $100,000

= 0.4X$100,000

= $40,000

Therefore, Earned Value (EV) is $40,000

3. Actual Cost (AC)The Actual Cost is the total cost incurred for the actual work completed to date; i.e. it is theamount of money you have spent till now.

As per the PMBOK Guide Actual Cost (AC) is the total cost actually incurred in accomplishing

work performed for an activity or WBS component.

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Actual Cost is also known as the Actual Cost of Work Performed (ACWP).

Example:

You have a project to be completed in 12 months and the total cost of the project is $100,000.Six months have passed and $60,000 is spent, but on closer review you find that only 40% of thework is completed so far.

What is the Actual Cost (AC)?

Finding the Actual Cost (AC) is simplest of all.

As per the definition of Actual Cost, it is the amount of money that you have been spent so far.

And in our question, you have spent $60,000 on the project so far.

Hence,

Actual Cost is $60,000

4. Schedule Performance Index (SPI)The Schedule Performance Index tells us about the efficiency of time utilized on the project. It isa measure of progress achieved compared to the planned progress.

Schedule Performance Index = (Earned Value)/(Planned Value)

SPI = EV/PV

The Schedule Performance Index informs us how efficiently we are actually progressingcompared to the planned progress.

Note:

If SPI is greater than one, this means more work has been completed than the plannedwork.

If SPI is less than one, this means less work is completed than the planned work. If SPI is equal to one, this means the work completed is equal to the planned work.5. Cost Performance Index (CPI)

The Cost Performance Index tells us about the efficiency of the cost utilized on the project. It isthe measure of the value of the work completed compared to the actual cost spent on the project.

Cost Performance Index = (Earned Value)/(Actual Cost)

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CPI = EV/AC

The Cost Performance Index informs us how much we are earning for each dollar spent on theproject.

Note:

If CPI is less than one, this means we are earning less than the spending. If CPI is greater than one, this means we are earning more than the spending. If CPI is equal to one, this means earning and spending is equal.

Network analysis

Network analysis is the general name given to certain specific techniques which can be used forthe planning, management and control of projects. One definition of a project (from the ProjectManagement Institute) is

A project is a temporary endeavour undertaken to create a "unique" product or

service

This definition serves to highlight some essential features of a project

it is temporary - it has a beginning and an end it is "unique" in some way

With regard to the use of the word unique I personally prefer to use the idea of "non-repetitive"or "non-routine", e.g. building the very first Boeing Jumbo jet was a project - building them nowis a repetitive/routine manufacturing process, not a project.

Two different techniques for network analysis were developed independently in the late 1950's -these were:

PERT (for Program Evaluation and Review Technique); and CPM (for Critical Path Management).

Network analysis is a vital technique in PROJECT MANAGEMENT. It enables us to take a systematic

quantitative structured approach to the problem of managing a project through to successful

completion. Moreover, as will become clear below, it has a graphical representation which means it can

be understood and used by those with a less technical background.

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Ar row diagramming method(ADM) is a network diagramming technique in whichactivities are represented by arrows.[1]ADM is also known as the activity-on-arrow (AOA)method.

ADM is used for scheduling activities in aproject plan.Precedence relationships between

activities are represented by circles connected by one or more arrows. The length of the arrowrepresents the duration of the relevant activity. ADM only shows finish-to-start relationships,meaning that each activity is completed before the successor activity starts.

Sometimes a "dummy task" is added, to represent a dependency between tasks, which does notrepresent any actual activity. The dummy task is added to indicate precedence that can't beexpressed using only the actual activities. Such a dummy task often has a completion time of 0.

Use of ADM as a common project management practice has declined with the adoption ofcomputer-based scheduling tools. In addition, the precedence diagram method (PDM), oractivity-on-node, is often favored over ADM.

[2]

ADM network drawing technique the start and end of each node or event is connected to anarrow.

The start of the arrow comes out of a node while the tip of the arrow goes into a node. Betweenthe two nodes lies an arrow that represents the activity.

The event represented by the circular node consumes neither time nor resources.

A node is a specific, definable achievement in the project. It has zero duration and consumes nil resources. All activities that lead into a node must be completed before the activity lies following

this node can start.

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The precedence diagram methodis a tool forschedulingactivities in aproject plan.It is amethod of constructing a project schedule network diagram that uses boxes, referred to as nodes,to represent activities and connects them with arrows that show the dependencies.

Critical tasks, noncritical tasks, and slack time Shows the relationship of the tasks to each other Allows for what-if, worst-case, best-case and most likely scenario

Key elements include determining predecessors and defining attributes such as

early start date late start date early finish date late finish date duration WBS reference

Resource levelingis aproject managementtechnique used to examine unbalanceduse of resources (usually people or equipment) over time, and for resolving over-allocations orconflicts.

When performing project planning activities, the manager will attempt to schedule certaintaskssimultaneously.When more resources such asmachinesor people are needed thanare available, or perhaps a specific person is needed in both tasks, the tasks will have tobe rescheduled concurrently or even sequentially to manage the constraint. Projectplanning resource leveling is the process of resolving these conflicts. It can also be usedto balance the workload of primary resources over the course of the project[s], usually atthe expense of one of the traditional triple constraints (time, cost, scope).

When using specially designed project software, leveling typically means resolvingconflicts or over allocations in the project plan by allowing the software to calculatedelays and update tasks automatically. Project management software leveling requiresdelaying tasks until resources are available. In more complex environments, resourcescould be allocated across multiple, concurrent projects thus requiring the process ofresource leveling to be performed at company level.

In either definition, leveling could result in a later project finish date if the tasks affectedare in thecritical path.

Resource leveling is also useful in the world of maintenance management. Manyorganizations have maintenance backlogs. These backlogs consist of work orders. In a"planned state" these work orders have estimates such as 2 electricians for 8 hours. Thesework orders have other attributes such as report date, priority, asset operationalrequirements, and safety concerns. These same organizations have a need to createweekly schedules. Resource-leveling can take the "work demand" and balance it againstthe resource pool availability for the given week. The goal is to create this weeklyschedule in advance of performing the work. Without resource-leveling the organization

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(planner, scheduler, supervisor) is most likely performing subjective selection. For themost part, when it comes to maintenance scheduling, there is less, if any, taskinterdependence, and therefore less need to calculate critical path andtotal float.

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