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Earned value management lecture 2009e my31
 

Earned value management lecture 2009e my31

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project cost management, earned value management, performance measurement, schedule variance, cost variance, budget

project cost management, earned value management, performance measurement, schedule variance, cost variance, budget

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    Earned value management lecture 2009e my31 Earned value management lecture 2009e my31 Presentation Transcript

    • Earned Value ManagementDrexel University, Goodwin College CT431-120 Project ManagementR. Gottardi, Instructor/Author May 31, 2009
    • Some Definitions• Planned Value, PV (BCWS): the portion of the approved total cost estimate during a given period• Actual Cost, AC: the total of the direct & indirect costs incurred in accomplishing work on a task or project during a given period 2
    • Project Tracking without Earned Value Project Performance BCWS Actual Cost 200 180 160 140 120$000 100 80 60 40 20 0 1 2 3 4 5 6 7 8 9 10 11 12 BCWS 10 20 25 40 62 80 98 125 137 149 160 175 Actual Cost 30 48 52 55 60 65 70 72 Weeks Conclusion: It looks like we are under budget. What’s missing? 3
    • What’s Missing• Any measure of how much work has been accomplished• Earned Value: an estimate of the value of the physical work actually completed• Can be – currency, e.g., $ – Quantities, e.g., tons, yds3, SF, etc. – Any agreed upon value for the tasks 4
    • How Can We Measure Progress?• % complete of the tasks’ durations• Rate of performance (RP): % complete actual/% compete planned• Physical quantities (works for some tasks but not others) – Tons of earth moved – Cubic yards of cement poured – Floors completed – Sq ft completed• Let’s use RP because it is common to many tasks & gives us a schedule related measure 5
    • Establish Earning RulesRule Credit at Start Credit at End0/100 0% 100%50/50 50% 50%25/75 25% 75%20/80 20% 80% Credit means the budgeted cost of work performed is included in the earned value calculation to the extent of the % indicated. 6
    • Earned Value Vs. Planned Value Project Performance PV(BCWS) EV(BCWP) 200 180 160 140 120$000 Schedule Variance 100 Behind Schedule 80 60 40 20 0 1 2 3 4 5 6 7 8 9 10 11 12 PV(BCWS) 10 20 25 40 62 80 98 125 137 149 160 175 EV(BCWP) 28 60 62 70 72 80 82 92 Weeks 7
    • Earned Value vs. Actual Cost Project Performance Actual Cost EV(BCWP) 100 90 Cost Variance ($) 80 Under Budget 70 60$000 50 40 30 20 10 0 1 2 3 4 5 6 7 8 9 10 11 12 Actual Cost 30 48 52 55 60 65 70 72 EV(BCWP) 28 60 62 70 72 80 82 92 Weeks 8
    • Combine All Variables Project Performance PV(BCWS) AC(Actual Cost) EV(BCWP) 200 180 160 PV 140 120$000 100 EV 80 60 AC 40 20 0 1 2 3 4 5 6 7 8 9 10 11 12 PV(BCWS) 10 20 25 40 62 80 98 125 137 149 160 175 AC(Actual Cost) 30 48 52 55 60 65 70 72 EV(BCWP) 28 60 62 70 72 80 82 92 Weeks 9
    • Variance Computations• Cost Variance (CV)=EV-AC• Schedule Variance (SV)=EV-PV• Negative values are unfavorable• Positive values are favorable 10
    • Performance Indices• Cost Performance Index (CPI)=EV/AC• Schedule Performance Index (SPI)=EV/PV• <1= unfavorable• >1=favorable 11
    • Earned Value• Integrates schedule & cost data• Explains causes of variances• Encourages objective measurement of progress• Measures performance 12
    • Problem• Given: • EV = $5,000 • PV = $10,000 • AC = $15,000• Solve: • CV = • SV = • CPI = • SPI = 13
    • Problem• Given: • EV = $5,000 = Earned Value • PV = $10,000 • AC = $15,000• Solve: • CV = • SV = • CPI = • SPI 14
    • Problem• Given: • EV = $5,000 = Earned Value = BCWP • PV = $10,000 • AC = $15,000• Solve: • CV = • SV = • CPI = • SPI = 15
    • Problem• Given: • EV = $5,000 = Earned Value = BCWP • PV = $10,000 = Planned Value • AC = $15,000• Solve: • CV = • SV = • CPI = • SPI = 16
    • Problem• Given: • EV = $5,000 = Earned Value = BCWP • PV = $10,000 = Planned Value =BCWS • AC = $15,000• Solve: • CV = • SV = • CPI = • SPI = 17
    • Problem• Given: • EV = $5,000 = Earned Value = BCWP • PV = $10,000 = Planned Value =BCWS • AC = $15,000 = Actual Cost• Solve: • CV = • SV = • CPI = • SPI = 18
    • Problem• Given: • EV = $5,000 = Earned Value = BCWP • PV = $10,000 = Planned Value =BSWS • AC = $15,000 = Actual Cost• Solve: • CV = EV-AC • SV = • CPI = • SPI = 19
    • Problem• Given: • EV = $5,000 = Earned Value = BCWP • PV = $10,000 = Planned Value =BSWS • AC = $15,000 = Actual Cost• Solve: • CV = EV-AC = 5,000-15,000 • SV = • CPI = • SPI = 20
    • Problem• Given: • EV = $5,000 = Earned Value = BCWP • PV = $10,000 = Planned Value =BSWS • AC = $15,000 = Actual Cost• Solve: • CV = EV-AC = 5,000-15,000 = -10,000 • SV = • CPI = • SPI = 21
    • Problem• Given: • EV = $5,000 = Earned Value = BCWP • PV = $10,000 = Planned Value =BSWS • AC = $15,000 = Actual Cost• Solve: • CV = EV-AC = 5,000-15,000 = -10,000 • SV = EV-PV • CPI = • SPI = 22
    • Problem• Given: • EV = $5,000 = Earned Value = BCWP • PV = $10,000 = Planned Value =BSWS • AC = $15,000 = Actual Cost• Solve: • CV = EV-AC = 5,000-15,000 = -10,000 • SV = EV-PV = 5,000-10,000 • CPI = • SPI = 23
    • Problem• Given: • EV = $5,000 = Earned Value = BCWP • PV = $10,000 = Planned Value =BSWS • AC = $15,000 = Actual Cost• Solve: • CV = EV-AC = 5,000-15,000 = -10,000 • SV = EV-PV = 5,000-10,000 = -5,000 • CPI = • SPI = 24
    • Problem• Given: • EV = $5,000 = Earned Value = BCWP • PV = $10,000 = Planned Value =BSWS • AC = $15,000 = Actual Cost• Solve: • CV = EV-AC = 5,000-15,000 = -10,000 • SV = EV-PV = 5,000-10,000 = -5,000 • CPI = EV/AC • SPI = 25
    • Problem• Given: • EV = $5,000 = Earned Value = BCWP • PV = $10,000 = Planned Value =BSWS • AC = $15,000 = Actual Cost• Solve: • CV = EV-AC = 5,000-15,000 = -10,000 • SV = EV-PV = 5,000-10,000 = -5,000 • CPI = EV/AC = 5,000/15,000 • SPI = 26
    • Problem• Given: • EV = $5,000 = Earned Value = BCWP • PV = $10,000 = Planned Value =BSWS • AC = $15,000 = Actual Cost• Solve: • CV = EV-AC = 5,000-15,000 = -10,000 • SV = EV-PV = 5,000-10,000 = -5,000 • CPI = EV/AC = 5,000/15,000 = .33 • SPI = 27
    • Problem• Given: • EV = $5,000 = Earned Value = BCWP • PV = $10,000 = Planned Value =BSWS • AC = $15,000 = Actual Cost• Solve: • CV = EV-AC = 5,000-15,000 = -10,000 • SV = EV-PV = 5,000-10,000 = -5,000 • CPI = EV/AC = 5,000/15,000 = .33 • SPI = EV/PV 28
    • Problem• Given: • EV = $5,000 = Earned Value = BCWP • PV = $10,000 = Planned Value =BSWS • AC = $15,000 = Actual Cost• Solve: • CV = EV-AC = 5,000-15,000 = -10,000 • SV = EV-PV = 5,000-10,000 = -5,000 • CPI = EV/AC = 5,000/15,000 = .33 • SPI = EV/PV = 5,000/10,000 29
    • Problem• Given: • EV = $5,000 = Earned Value = BCWP • PV = $10,000 = Planned Value =BCWS • AC = $15,000 = Actual Cost• Solve: • CV = EV-AC = 5,000-15,000 = -10,000 • SV = EV-PV = 5,000-10,000 = -5,000 • CPI = EV/AC = 5,000/15,000 = .33 • SPI = EV/PV = 5,000/10,000 = .5 30
    • Other Terms & Computations• BAC: Budget at Completion: The original total budget for a project• EAC: Estimate at Completion = BAC/CPI (CPI = Cost Performance Index)• ETC: Estimate to Complete: EAC-AC• Variance at Completion: BAC-EAC 31
    • Earned Value• Title: Earned Value Management• Filename: Earned Value Management Lecture 2009eMY31• Author: Ron Gottardi• Author Affiliation: Drexel University, Goodwin College of Professional Studies• Course: CT431-120 Project management• Date: May 31, 2009• Copyright 2009 Ron Gottardi 32