SlideShare a Scribd company logo
PMP COST FormulaE
Introduction:
o Project Cost Management is the knowledge use for managing
costs. It helps to ensure a project is completed within the
approved budget
o It includes the processes involving in estimating, budgeting and
controlling costs
o These processes interact with each other and with processes in
the other nine knowledge areas as well
Developing a Cost/Schedule System:
Define
work
using a
WBS
Create
work and
resource
schedules
Develop
a time-
phased
budget
Collect
Cost
Data (at
the work
package
level)
Compute
variances
o Scope
o Work packages
o Deliverables
o Organization units
o Resources
o Budgets
o Schedule
resources
to activities
o Time-phase
work
packages into
a network
o Use work
packages
included in
an activity.
Accumulate
budgets (PV).
o Use work
packages
included in
an activity.
Accumulate
budgets
(PV)
o Compute the
schedule variance
(EV-PV) and the
cost variance (EV-
AC)
Cost Relationships Overview:
Development of Project Baselines:
Purposes of a Baseline
o It is an anchor point for measuring performance
o A planned cost and expected schedule against which actual cost and schedule are measured
o A summation of time-phased budgets (cost accounts as summed work packages) along a
project timeline
What Costs Are Included in Baselines?
o Labor, equipment, materials, project direct overhead costs (DOC)
Rules for Placing Costs in Baselines
o Costs are placed exactly as they are expected to be “earned” in order to track
them to their point of origin
o Percent Complete Rule
o Costs are periodically assigned to a baseline as units of work are completed over the duration
of a work package
o Project Manager can use the information about the
project progress to help control the schedule and
cost to assess whether the project is on track
through earned value management (EVM)
o EVM uses Variance Analysis methodology
o Other alternative methods are:
o Ask team members for a % of the work completed in each
work package or activity
o Team member provides a simple “guess” of work
performed
Earned Value Management (EVM):
Methods of Variance Analysis in EVM:
Comparing Earned Value
oWith the expected schedule value
oWith the actual costs
Assessing Status of a Project
oRequired data elements
o Budgeted cost of the work scheduled (PV)
o Budgeted cost of the work completed (EV)
o Actual cost of the work completed (AC)
oCalculate cost and schedule variances
o A positive variance indicates a desirable condition,
while a negative variance suggests problems or
changes that have taken place
oCost Variance (CV)
oIndicates if the work accomplished using labor
and materials costs more or less than was
planned at any point in the project
oSchedule Variance (SV)
oPresents an overall assessment in dollar terms
of the progress of all work packages in the
project scheduled to date
Methods of Variance Analysis in EVM:
Project Cost Management:
ESTIMATE
COST
DETERMIN
E
COST
CONTROL
COST
The process involved in planning, estimating, budgeting, and controlling costs so that the
budget can be completed within the approved budget
Developing an
estimate of costs of
the resources
needed to
complete a project
Allocating overall
cost estimate to
individual work
items “cost
baseline”
Controlling change
to project budget
PLANNING MONITOR & CONTROL
Monitor & Control Costs : CONTROL
COST
Cost Baseline
Project Funding Requirements
Performance Reports
Work Performance
Information
Approved Change Requests
Project Management Plan
Cost Change Control System
Performance Measurement
Analysis
Forecasting
Project Performance
Reviews
Project Performance
Software
Variance Management
Inputs Tools & Techniques Outputs
Cost Estimate Updates
Cost Baseline Updates
Performance
Measurements
Forecasted Completion
Recommended Corrective
Action
Organizational Process
Assets Updates
Project Management Plan
Updates
o Monitor Cost Performance
o Ensure that changes are included in cost baseline
o Inform stakeholders of authorized changes which impact
cost
Cost Budget Breakdown:
Project
ReservesNot Used in Earned Value
Calculations
Used in Earned Value Calculations
Cost Budget
Management
Reserve
Cost Baseline
Contingency
Reserve
Project
Control Account
Work Package
Activity
Tasks
Project
WBS
Schedule
Work Breakdown Structure Schedule Information
Budget Breakdown
Cost Budget Components:
Terms:
EV Earned value for a task is simply the percent complete times its original budget. Stated differently, EV is the percent of the original
budget that has been earned by actual work completed.
PV The planned time-phased baseline of the value of the work scheduled. An approved cost estimate of the resources scheduled in a
time-phased cumulative baseline [BCWS—budgeted cost of the work scheduled].
AC Actual cost of the work completed. The sum of the costs incurred in accomplishing work. [ACWP—actual cost of the work
performed].
CV Cost variance is the difference between the earned value and the actual costs for the work completed to date where CV = EV – AC
SV Schedule variance is the difference between the earned value and the baseline line to date where SV = EV – PV
BAC Budgeted cost at completion. Total budgeted cost of the baseline or project cost accounts.
EAC Estimated costs at completion.
ETC Estimated costs to complete remaining work.
VAC Cost variance at completion. VAC indicates expected actual over- or under-run cost at completion.
Terms:
Performance Indexes:
• Cost Performance Index (CPI)
• Measures the cost efficiency of work accomplished to
date.
• CPI = EV/AC
• Scheduling Performance Index (SPI)
• Measures scheduling efficiency
• SPI = EV/PV
• Percent Complete Indexes
• Indicates how much of the work accomplished represents
of the total budgeted (BAC) and actual (AC) dollars to
date.
• PCIB = EV/BAC
• PCIC = AC/EAC
Terms:
Index Cost (CPI) Schedule (SPI)
>1.00 Under cost Ahead of schedule
=1.00 On cost On schedule
<1.00 Over cost Behind schedule
Cost /Schedule Graph:
Cost /Schedule Graphs: SV = EV -
PVCV = EV - AC
EV
Earned Value = EV
The value of the work
accomplished until this point
in time. Cost is as per the
original budget.
“ As of today, what is the
estimated value of the work
actually accomplished? “
PV
Planned Value = PV
Planned cost or value of the
work to be done until this
point in time.
“ As of today, what is the
estimated value of the work
planned to be done? “
AC
Actual Costs = AC
The costs actually incurred to
complete the work until this
point in time.
“ As of today, what is the
actual costs incurred for the
work accomplished? “
BAC
Budget At Completion =
BAC
The total planned value or
budget for completing the
entire project.
“ How much did we budget
for the total project? “
CV
Cost Variance = CV
CV = EV - AC
o Positive is Under Budget
o Negative is Over budget
SV
Schedule Variance = SV
SV = EV - PV
o Positive is ahead of
schedule
o Negative is behind
schedule
CPI
Cost Performance Index =
CPI
CPI =
o We are getting $___
worth out of every $1
spent.
o Greater than 1 is good;
less than 1 is bad
EV
AC
SPI
Schedule Performance
Index = SPI
SPI =
o We are progressing at
___% of the rate
originally planned.
o Greater than 1 is good;
less than 1 is bad
EV
PV
EAC
Estimate At Completion = EAC
Prediction of what project will
cost when completed..
“ What do we currently expect the
total project to cost (a forecast)?
“
There are 4 types:EAC = AC + Bottom up
ETC
BAC
CPI
EAC = AC + (BAC – EV)
EAC =
EAC =
(BAC – EV)
(CPI x SPI)
Used when the
original estimate
was flawed
Used when there are no variances
from BAC. Most common one for
exam
Used when the current
variances are “atypical” of
the future
Used when the current
variances are “typical” of the
future
ETC
Estimate To Complete = ETC
From this point on, How much
More do we expect it to cost to
finish the project ? (a Forecast)
How much more will the project
cost?
ETC = EAC - AC
VAC
Variance At Completion = VAC
As of today, how much over or
under budget will we be at the
end of the project ?
VAC = BAC -
EAC
TCPI
To Complete Performance
Index = TCPI
In order to stay within budget,
what rate must we meet for the
remaining work?
TCPI
=
(BAC – EV)
(BAC - AC)
o It divides the work remaining to be done
by the money remaining to do it
o Greater than 1 is bad; less than 1 is good
Thank You
Connect with me @
@

More Related Content

What's hot

Earned value analysis training
Earned value analysis trainingEarned value analysis training
Earned value analysis training
Paul King
 
Projects Performance Analysis & Forecasting
Projects Performance Analysis & Forecasting Projects Performance Analysis & Forecasting
Project Management Earned Value
Project Management Earned ValueProject Management Earned Value
Project Management Earned Value
constructioninside
 
Earned Value Analysis
Earned Value AnalysisEarned Value Analysis
Earned Value Analysis
Saqib Raza
 
Earned value
Earned valueEarned value
Earned value
Oliver
 
Earned Value Management
Earned Value ManagementEarned Value Management
Earned Value Management
Matt Stehling
 
Earned value analysis - presentation
Earned value analysis  -  presentationEarned value analysis  -  presentation
Earned value analysis - presentation
ProPM Academy
 
Earned value management
Earned value managementEarned value management
Earned value management
Ashif AR
 
Earned value analysis for a construction project
Earned value analysis for a construction projectEarned value analysis for a construction project
Earned value analysis for a construction project
IAEME Publication
 
Earned value 01
Earned value 01Earned value 01
EVM of Project Management...
EVM of Project Management...EVM of Project Management...
EVM of Project Management...
Fahad Ali
 
Earned Value Management
Earned Value ManagementEarned Value Management
Earned Value Management
Anand Subramaniam
 
Earned Value Management
Earned Value ManagementEarned Value Management
Earned Value Management
Mansoor Shoaib
 
Project Control Process
Project Control ProcessProject Control Process
Project Control Process
haroldtaylor1113
 
Earned value for pmp and pmi acp exam
Earned value for pmp and pmi acp examEarned value for pmp and pmi acp exam
Earned value for pmp and pmi acp exam
Manish Purwar
 
Earned Value Analysis in Project Management — an Easy Cheat Sheet 🡆 http://b...
Earned Value Analysis in Project Management — an Easy Cheat Sheet  🡆 http://b...Earned Value Analysis in Project Management — an Easy Cheat Sheet  🡆 http://b...
Earned Value Analysis in Project Management — an Easy Cheat Sheet 🡆 http://b...
Tipsographic . com
 
A simple example of Earned Value Management (EVM) in action
A simple example of Earned Value Management (EVM) in actionA simple example of Earned Value Management (EVM) in action
A simple example of Earned Value Management (EVM) in action
Planisware
 
Project cost & control
Project cost & controlProject cost & control
Project cost & control
AMARAYYA
 
Earned value Project Management (evpm)
Earned value Project Management (evpm)Earned value Project Management (evpm)
Earned value Project Management (evpm)
Ejaz Bhatti
 
Earned Value Management
Earned Value ManagementEarned Value Management
Earned Value Management
Russell Taylor BEng CEng FAPM FIET
 

What's hot (20)

Earned value analysis training
Earned value analysis trainingEarned value analysis training
Earned value analysis training
 
Projects Performance Analysis & Forecasting
Projects Performance Analysis & Forecasting Projects Performance Analysis & Forecasting
Projects Performance Analysis & Forecasting
 
Project Management Earned Value
Project Management Earned ValueProject Management Earned Value
Project Management Earned Value
 
Earned Value Analysis
Earned Value AnalysisEarned Value Analysis
Earned Value Analysis
 
Earned value
Earned valueEarned value
Earned value
 
Earned Value Management
Earned Value ManagementEarned Value Management
Earned Value Management
 
Earned value analysis - presentation
Earned value analysis  -  presentationEarned value analysis  -  presentation
Earned value analysis - presentation
 
Earned value management
Earned value managementEarned value management
Earned value management
 
Earned value analysis for a construction project
Earned value analysis for a construction projectEarned value analysis for a construction project
Earned value analysis for a construction project
 
Earned value 01
Earned value 01Earned value 01
Earned value 01
 
EVM of Project Management...
EVM of Project Management...EVM of Project Management...
EVM of Project Management...
 
Earned Value Management
Earned Value ManagementEarned Value Management
Earned Value Management
 
Earned Value Management
Earned Value ManagementEarned Value Management
Earned Value Management
 
Project Control Process
Project Control ProcessProject Control Process
Project Control Process
 
Earned value for pmp and pmi acp exam
Earned value for pmp and pmi acp examEarned value for pmp and pmi acp exam
Earned value for pmp and pmi acp exam
 
Earned Value Analysis in Project Management — an Easy Cheat Sheet 🡆 http://b...
Earned Value Analysis in Project Management — an Easy Cheat Sheet  🡆 http://b...Earned Value Analysis in Project Management — an Easy Cheat Sheet  🡆 http://b...
Earned Value Analysis in Project Management — an Easy Cheat Sheet 🡆 http://b...
 
A simple example of Earned Value Management (EVM) in action
A simple example of Earned Value Management (EVM) in actionA simple example of Earned Value Management (EVM) in action
A simple example of Earned Value Management (EVM) in action
 
Project cost & control
Project cost & controlProject cost & control
Project cost & control
 
Earned value Project Management (evpm)
Earned value Project Management (evpm)Earned value Project Management (evpm)
Earned value Project Management (evpm)
 
Earned Value Management
Earned Value ManagementEarned Value Management
Earned Value Management
 

Similar to PMP COST FORMULAE

Project monitoring & Earned Value Analysis
Project monitoring & Earned Value AnalysisProject monitoring & Earned Value Analysis
Project monitoring & Earned Value Analysis
BECM, RUET, Bangladesh
 
Project Cost Management - PMP preparation course
Project Cost Management - PMP preparation courseProject Cost Management - PMP preparation course
Project Cost Management - PMP preparation course
Vladimir Vujovic
 
projectcostcontrol-130625012804-phpapp02 (1)
projectcostcontrol-130625012804-phpapp02 (1)projectcostcontrol-130625012804-phpapp02 (1)
projectcostcontrol-130625012804-phpapp02 (1)
Nita Cristian
 
Project Management EVM & SCBA
Project Management EVM & SCBAProject Management EVM & SCBA
EVA - Metrics.ppt
EVA - Metrics.pptEVA - Metrics.ppt
EVA - Metrics.ppt
NivethaSampath3
 
PM - EVM - Dr Najam Abbas - OHT 1.pdf
PM - EVM - Dr Najam Abbas - OHT 1.pdfPM - EVM - Dr Najam Abbas - OHT 1.pdf
PM - EVM - Dr Najam Abbas - OHT 1.pdf
Najm Naqvi
 
5. PAE AcFn621 Ch-5 Execution and Monitoring.ppt
5. PAE AcFn621 Ch-5 Execution and Monitoring.ppt5. PAE AcFn621 Ch-5 Execution and Monitoring.ppt
5. PAE AcFn621 Ch-5 Execution and Monitoring.ppt
ProfDrAnbalaganChinn
 
Project monitoring lecture 1
Project monitoring lecture 1Project monitoring lecture 1
Project monitoring lecture 1
BECM, RUET, Bangladesh
 
Project Cost Management
Project Cost ManagementProject Cost Management
Project Cost Management
Serdar Temiz
 
Project cost control
Project cost controlProject cost control
Project cost control
Sourabh Modgil
 
Primavera Calender and Earned Value.pdf..
Primavera Calender and Earned Value.pdf..Primavera Calender and Earned Value.pdf..
Primavera Calender and Earned Value.pdf..
EngrMuhammadJavidNaw
 
Pmp cost chapter 7
Pmp cost chapter 7Pmp cost chapter 7
Pmp cost chapter 7
Ahmed Elshaboury,PMP,LEED GA
 
cost-managementtttttttttttttttttttttttttttttt.ppt
cost-managementtttttttttttttttttttttttttttttt.pptcost-managementtttttttttttttttttttttttttttttt.ppt
cost-managementtttttttttttttttttttttttttttttt.ppt
RedhaElhuni
 
Earned Value AnalysisTracking Project ProgressWh.docx
Earned Value AnalysisTracking Project ProgressWh.docxEarned Value AnalysisTracking Project ProgressWh.docx
Earned Value AnalysisTracking Project ProgressWh.docx
sagarlesley
 
EVM excercise EVM excercise concepts & fundamentals
EVM excercise EVM excercise concepts & fundamentalsEVM excercise EVM excercise concepts & fundamentals
EVM excercise EVM excercise concepts & fundamentals
pmmukeshk
 
Earned value management
Earned value managementEarned value management
Earned value management
Gautam Kumar
 
COST MANAGEMENT REPORT
COST MANAGEMENT REPORT COST MANAGEMENT REPORT
COST MANAGEMENT REPORT
Jo Balucanag - Bitonio
 
Projects Control Using Earned Value Techniques - Part One
Projects Control Using Earned Value Techniques - Part OneProjects Control Using Earned Value Techniques - Part One
Projects Control Using Earned Value Techniques - Part One
Waleed Hamdy Albana
 
project control using earned value analysis - Part 01
project control using earned value analysis - Part 01 project control using earned value analysis - Part 01
project control using earned value analysis - Part 01
waleed hamdy
 
Project Management: Cost Management Knowledge Area
Project Management: Cost Management Knowledge AreaProject Management: Cost Management Knowledge Area
Project Management: Cost Management Knowledge Area
Joshua Render
 

Similar to PMP COST FORMULAE (20)

Project monitoring & Earned Value Analysis
Project monitoring & Earned Value AnalysisProject monitoring & Earned Value Analysis
Project monitoring & Earned Value Analysis
 
Project Cost Management - PMP preparation course
Project Cost Management - PMP preparation courseProject Cost Management - PMP preparation course
Project Cost Management - PMP preparation course
 
projectcostcontrol-130625012804-phpapp02 (1)
projectcostcontrol-130625012804-phpapp02 (1)projectcostcontrol-130625012804-phpapp02 (1)
projectcostcontrol-130625012804-phpapp02 (1)
 
Project Management EVM & SCBA
Project Management EVM & SCBAProject Management EVM & SCBA
Project Management EVM & SCBA
 
EVA - Metrics.ppt
EVA - Metrics.pptEVA - Metrics.ppt
EVA - Metrics.ppt
 
PM - EVM - Dr Najam Abbas - OHT 1.pdf
PM - EVM - Dr Najam Abbas - OHT 1.pdfPM - EVM - Dr Najam Abbas - OHT 1.pdf
PM - EVM - Dr Najam Abbas - OHT 1.pdf
 
5. PAE AcFn621 Ch-5 Execution and Monitoring.ppt
5. PAE AcFn621 Ch-5 Execution and Monitoring.ppt5. PAE AcFn621 Ch-5 Execution and Monitoring.ppt
5. PAE AcFn621 Ch-5 Execution and Monitoring.ppt
 
Project monitoring lecture 1
Project monitoring lecture 1Project monitoring lecture 1
Project monitoring lecture 1
 
Project Cost Management
Project Cost ManagementProject Cost Management
Project Cost Management
 
Project cost control
Project cost controlProject cost control
Project cost control
 
Primavera Calender and Earned Value.pdf..
Primavera Calender and Earned Value.pdf..Primavera Calender and Earned Value.pdf..
Primavera Calender and Earned Value.pdf..
 
Pmp cost chapter 7
Pmp cost chapter 7Pmp cost chapter 7
Pmp cost chapter 7
 
cost-managementtttttttttttttttttttttttttttttt.ppt
cost-managementtttttttttttttttttttttttttttttt.pptcost-managementtttttttttttttttttttttttttttttt.ppt
cost-managementtttttttttttttttttttttttttttttt.ppt
 
Earned Value AnalysisTracking Project ProgressWh.docx
Earned Value AnalysisTracking Project ProgressWh.docxEarned Value AnalysisTracking Project ProgressWh.docx
Earned Value AnalysisTracking Project ProgressWh.docx
 
EVM excercise EVM excercise concepts & fundamentals
EVM excercise EVM excercise concepts & fundamentalsEVM excercise EVM excercise concepts & fundamentals
EVM excercise EVM excercise concepts & fundamentals
 
Earned value management
Earned value managementEarned value management
Earned value management
 
COST MANAGEMENT REPORT
COST MANAGEMENT REPORT COST MANAGEMENT REPORT
COST MANAGEMENT REPORT
 
Projects Control Using Earned Value Techniques - Part One
Projects Control Using Earned Value Techniques - Part OneProjects Control Using Earned Value Techniques - Part One
Projects Control Using Earned Value Techniques - Part One
 
project control using earned value analysis - Part 01
project control using earned value analysis - Part 01 project control using earned value analysis - Part 01
project control using earned value analysis - Part 01
 
Project Management: Cost Management Knowledge Area
Project Management: Cost Management Knowledge AreaProject Management: Cost Management Knowledge Area
Project Management: Cost Management Knowledge Area
 

More from Bhaskara Reddy Sannapureddy

CapEx vs OpEx for IT & Cloud
CapEx vs OpEx for IT & CloudCapEx vs OpEx for IT & Cloud
CapEx vs OpEx for IT & Cloud
Bhaskara Reddy Sannapureddy
 
Smart CRM through Smart Internet of Things
Smart CRM through Smart Internet of ThingsSmart CRM through Smart Internet of Things
Smart CRM through Smart Internet of Things
Bhaskara Reddy Sannapureddy
 
Oracle Apps - Forms
Oracle Apps - FormsOracle Apps - Forms
Oracle Apps - Forms
Bhaskara Reddy Sannapureddy
 
Groovyscriptingformanualandautomationtestingusingrobotframework 141221014703-...
Groovyscriptingformanualandautomationtestingusingrobotframework 141221014703-...Groovyscriptingformanualandautomationtestingusingrobotframework 141221014703-...
Groovyscriptingformanualandautomationtestingusingrobotframework 141221014703-...
Bhaskara Reddy Sannapureddy
 
R vs python
R vs pythonR vs python
Oracle Service Cloud(Rightnow) Integration with EBS and JIRA
Oracle Service Cloud(Rightnow) Integration with EBS and JIRAOracle Service Cloud(Rightnow) Integration with EBS and JIRA
Oracle Service Cloud(Rightnow) Integration with EBS and JIRA
Bhaskara Reddy Sannapureddy
 
Cloud computing and Order Management As A Service (OMAAS)
Cloud computing and Order Management As A Service (OMAAS)Cloud computing and Order Management As A Service (OMAAS)
Cloud computing and Order Management As A Service (OMAAS)
Bhaskara Reddy Sannapureddy
 
What is Cloud DBMS?
What is Cloud DBMS?What is Cloud DBMS?
What is Cloud DBMS?
Bhaskara Reddy Sannapureddy
 
Oracle_Sales_Presales_Fusion CRM_RightNow_OPA_Certificates
Oracle_Sales_Presales_Fusion CRM_RightNow_OPA_CertificatesOracle_Sales_Presales_Fusion CRM_RightNow_OPA_Certificates
Oracle_Sales_Presales_Fusion CRM_RightNow_OPA_Certificates
Bhaskara Reddy Sannapureddy
 
Healthcare Cloud Solutions
Healthcare Cloud SolutionsHealthcare Cloud Solutions
Healthcare Cloud Solutions
Bhaskara Reddy Sannapureddy
 
Best Practices for Applications Performance Testing
Best Practices for Applications Performance TestingBest Practices for Applications Performance Testing
Best Practices for Applications Performance Testing
Bhaskara Reddy Sannapureddy
 
Eloqua Integration with CRM and Oracle Sales Cloud
Eloqua Integration with CRM and Oracle Sales CloudEloqua Integration with CRM and Oracle Sales Cloud
Eloqua Integration with CRM and Oracle Sales Cloud
Bhaskara Reddy Sannapureddy
 
Groovy scripting for manual and automation testing (Using Robot Framework)
Groovy scripting for manual and automation testing (Using Robot Framework)Groovy scripting for manual and automation testing (Using Robot Framework)
Groovy scripting for manual and automation testing (Using Robot Framework)
Bhaskara Reddy Sannapureddy
 
BIG DATA and USE CASES
BIG DATA and USE CASESBIG DATA and USE CASES
BIG DATA and USE CASES
Bhaskara Reddy Sannapureddy
 
Seven Steps to Better Customer Experience Management (CEM)
Seven Steps to Better Customer Experience Management (CEM)Seven Steps to Better Customer Experience Management (CEM)
Seven Steps to Better Customer Experience Management (CEM)
Bhaskara Reddy Sannapureddy
 
What is Machine Learning
What is Machine LearningWhat is Machine Learning
What is Machine Learning
Bhaskara Reddy Sannapureddy
 
What is Graph Database
What is Graph DatabaseWhat is Graph Database
What is Graph Database
Bhaskara Reddy Sannapureddy
 
Predictive Analytics using R
Predictive Analytics using RPredictive Analytics using R
Predictive Analytics using R
Bhaskara Reddy Sannapureddy
 
What is Customer Experience Management (CEM)
What is Customer Experience Management (CEM)What is Customer Experience Management (CEM)
What is Customer Experience Management (CEM)
Bhaskara Reddy Sannapureddy
 

More from Bhaskara Reddy Sannapureddy (20)

CapEx vs OpEx for IT & Cloud
CapEx vs OpEx for IT & CloudCapEx vs OpEx for IT & Cloud
CapEx vs OpEx for IT & Cloud
 
Smart CRM through Smart Internet of Things
Smart CRM through Smart Internet of ThingsSmart CRM through Smart Internet of Things
Smart CRM through Smart Internet of Things
 
Oracle Apps - Forms
Oracle Apps - FormsOracle Apps - Forms
Oracle Apps - Forms
 
Groovyscriptingformanualandautomationtestingusingrobotframework 141221014703-...
Groovyscriptingformanualandautomationtestingusingrobotframework 141221014703-...Groovyscriptingformanualandautomationtestingusingrobotframework 141221014703-...
Groovyscriptingformanualandautomationtestingusingrobotframework 141221014703-...
 
R vs python
R vs pythonR vs python
R vs python
 
Oracle Service Cloud(Rightnow) Integration with EBS and JIRA
Oracle Service Cloud(Rightnow) Integration with EBS and JIRAOracle Service Cloud(Rightnow) Integration with EBS and JIRA
Oracle Service Cloud(Rightnow) Integration with EBS and JIRA
 
Cloud computing and Order Management As A Service (OMAAS)
Cloud computing and Order Management As A Service (OMAAS)Cloud computing and Order Management As A Service (OMAAS)
Cloud computing and Order Management As A Service (OMAAS)
 
What is Cloud DBMS?
What is Cloud DBMS?What is Cloud DBMS?
What is Cloud DBMS?
 
Oracle_Sales_Presales_Fusion CRM_RightNow_OPA_Certificates
Oracle_Sales_Presales_Fusion CRM_RightNow_OPA_CertificatesOracle_Sales_Presales_Fusion CRM_RightNow_OPA_Certificates
Oracle_Sales_Presales_Fusion CRM_RightNow_OPA_Certificates
 
Healthcare cloud solutions
Healthcare cloud solutionsHealthcare cloud solutions
Healthcare cloud solutions
 
Healthcare Cloud Solutions
Healthcare Cloud SolutionsHealthcare Cloud Solutions
Healthcare Cloud Solutions
 
Best Practices for Applications Performance Testing
Best Practices for Applications Performance TestingBest Practices for Applications Performance Testing
Best Practices for Applications Performance Testing
 
Eloqua Integration with CRM and Oracle Sales Cloud
Eloqua Integration with CRM and Oracle Sales CloudEloqua Integration with CRM and Oracle Sales Cloud
Eloqua Integration with CRM and Oracle Sales Cloud
 
Groovy scripting for manual and automation testing (Using Robot Framework)
Groovy scripting for manual and automation testing (Using Robot Framework)Groovy scripting for manual and automation testing (Using Robot Framework)
Groovy scripting for manual and automation testing (Using Robot Framework)
 
BIG DATA and USE CASES
BIG DATA and USE CASESBIG DATA and USE CASES
BIG DATA and USE CASES
 
Seven Steps to Better Customer Experience Management (CEM)
Seven Steps to Better Customer Experience Management (CEM)Seven Steps to Better Customer Experience Management (CEM)
Seven Steps to Better Customer Experience Management (CEM)
 
What is Machine Learning
What is Machine LearningWhat is Machine Learning
What is Machine Learning
 
What is Graph Database
What is Graph DatabaseWhat is Graph Database
What is Graph Database
 
Predictive Analytics using R
Predictive Analytics using RPredictive Analytics using R
Predictive Analytics using R
 
What is Customer Experience Management (CEM)
What is Customer Experience Management (CEM)What is Customer Experience Management (CEM)
What is Customer Experience Management (CEM)
 

Recently uploaded

Computer HARDWARE presenattion by CWD students class 10
Computer HARDWARE presenattion by CWD students class 10Computer HARDWARE presenattion by CWD students class 10
Computer HARDWARE presenattion by CWD students class 10
ankush9927
 
Litestack talk at Brighton 2024 (Unleashing the power of SQLite for Ruby apps)
Litestack talk at Brighton 2024 (Unleashing the power of SQLite for Ruby apps)Litestack talk at Brighton 2024 (Unleashing the power of SQLite for Ruby apps)
Litestack talk at Brighton 2024 (Unleashing the power of SQLite for Ruby apps)
Muhammad Ali
 
(CISOPlatform Summit & SACON 2024) Gen AI & Deepfake In Overall Security.pdf
(CISOPlatform Summit & SACON 2024) Gen AI & Deepfake In Overall Security.pdf(CISOPlatform Summit & SACON 2024) Gen AI & Deepfake In Overall Security.pdf
(CISOPlatform Summit & SACON 2024) Gen AI & Deepfake In Overall Security.pdf
Priyanka Aash
 
High Profile Girls Call ServiCe Hyderabad 0000000000 Tanisha Best High Class ...
High Profile Girls Call ServiCe Hyderabad 0000000000 Tanisha Best High Class ...High Profile Girls Call ServiCe Hyderabad 0000000000 Tanisha Best High Class ...
High Profile Girls Call ServiCe Hyderabad 0000000000 Tanisha Best High Class ...
aslasdfmkhan4750
 
Integrating Kafka with MuleSoft 4 and usecase
Integrating Kafka with MuleSoft 4 and usecaseIntegrating Kafka with MuleSoft 4 and usecase
Integrating Kafka with MuleSoft 4 and usecase
shyamraj55
 
(CISOPlatform Summit & SACON 2024) Workshop _ Most Dangerous Attack Technique...
(CISOPlatform Summit & SACON 2024) Workshop _ Most Dangerous Attack Technique...(CISOPlatform Summit & SACON 2024) Workshop _ Most Dangerous Attack Technique...
(CISOPlatform Summit & SACON 2024) Workshop _ Most Dangerous Attack Technique...
Priyanka Aash
 
Types of Weaving loom machine & it's technology
Types of Weaving loom machine & it's technologyTypes of Weaving loom machine & it's technology
Types of Weaving loom machine & it's technology
ldtexsolbl
 
Vertex AI Agent Builder - GDG Alicante - Julio 2024
Vertex AI Agent Builder - GDG Alicante - Julio 2024Vertex AI Agent Builder - GDG Alicante - Julio 2024
Vertex AI Agent Builder - GDG Alicante - Julio 2024
Nicolás Lopéz
 
Introduction-to-the-IAM-Platform-Implementation-Plan.pptx
Introduction-to-the-IAM-Platform-Implementation-Plan.pptxIntroduction-to-the-IAM-Platform-Implementation-Plan.pptx
Introduction-to-the-IAM-Platform-Implementation-Plan.pptx
313mohammedarshad
 
EuroPython 2024 - Streamlining Testing in a Large Python Codebase
EuroPython 2024 - Streamlining Testing in a Large Python CodebaseEuroPython 2024 - Streamlining Testing in a Large Python Codebase
EuroPython 2024 - Streamlining Testing in a Large Python Codebase
Jimmy Lai
 
Evolution of iPaaS - simplify IT workloads to provide a unified view of data...
Evolution of iPaaS - simplify IT workloads to provide a unified view of  data...Evolution of iPaaS - simplify IT workloads to provide a unified view of  data...
Evolution of iPaaS - simplify IT workloads to provide a unified view of data...
Torry Harris
 
Data Integration Basics: Merging & Joining Data
Data Integration Basics: Merging & Joining DataData Integration Basics: Merging & Joining Data
Data Integration Basics: Merging & Joining Data
Safe Software
 
Dublin_mulesoft_meetup_Mulesoft_Salesforce_Integration (1).pptx
Dublin_mulesoft_meetup_Mulesoft_Salesforce_Integration (1).pptxDublin_mulesoft_meetup_Mulesoft_Salesforce_Integration (1).pptx
Dublin_mulesoft_meetup_Mulesoft_Salesforce_Integration (1).pptx
Kunal Gupta
 
(CISOPlatform Summit & SACON 2024) Keynote _ Power Digital Identities With AI...
(CISOPlatform Summit & SACON 2024) Keynote _ Power Digital Identities With AI...(CISOPlatform Summit & SACON 2024) Keynote _ Power Digital Identities With AI...
(CISOPlatform Summit & SACON 2024) Keynote _ Power Digital Identities With AI...
Priyanka Aash
 
IPLOOK Remote-Sensing Satellite Solution
IPLOOK Remote-Sensing Satellite SolutionIPLOOK Remote-Sensing Satellite Solution
IPLOOK Remote-Sensing Satellite Solution
IPLOOK Networks
 
Step-By-Step Process to Develop a Mobile App From Scratch
Step-By-Step Process to Develop a Mobile App From ScratchStep-By-Step Process to Develop a Mobile App From Scratch
Step-By-Step Process to Develop a Mobile App From Scratch
softsuave
 
Mastering OnlyFans Clone App Development: Key Strategies for Success
Mastering OnlyFans Clone App Development: Key Strategies for SuccessMastering OnlyFans Clone App Development: Key Strategies for Success
Mastering OnlyFans Clone App Development: Key Strategies for Success
David Wilson
 
Semantic-Aware Code Model: Elevating the Future of Software Development
Semantic-Aware Code Model: Elevating the Future of Software DevelopmentSemantic-Aware Code Model: Elevating the Future of Software Development
Semantic-Aware Code Model: Elevating the Future of Software Development
Baishakhi Ray
 
leewayhertz.com-Generative AI tech stack Frameworks infrastructure models and...
leewayhertz.com-Generative AI tech stack Frameworks infrastructure models and...leewayhertz.com-Generative AI tech stack Frameworks infrastructure models and...
leewayhertz.com-Generative AI tech stack Frameworks infrastructure models and...
alexjohnson7307
 
Uncharted Together- Navigating AI's New Frontiers in Libraries
Uncharted Together- Navigating AI's New Frontiers in LibrariesUncharted Together- Navigating AI's New Frontiers in Libraries
Uncharted Together- Navigating AI's New Frontiers in Libraries
Brian Pichman
 

Recently uploaded (20)

Computer HARDWARE presenattion by CWD students class 10
Computer HARDWARE presenattion by CWD students class 10Computer HARDWARE presenattion by CWD students class 10
Computer HARDWARE presenattion by CWD students class 10
 
Litestack talk at Brighton 2024 (Unleashing the power of SQLite for Ruby apps)
Litestack talk at Brighton 2024 (Unleashing the power of SQLite for Ruby apps)Litestack talk at Brighton 2024 (Unleashing the power of SQLite for Ruby apps)
Litestack talk at Brighton 2024 (Unleashing the power of SQLite for Ruby apps)
 
(CISOPlatform Summit & SACON 2024) Gen AI & Deepfake In Overall Security.pdf
(CISOPlatform Summit & SACON 2024) Gen AI & Deepfake In Overall Security.pdf(CISOPlatform Summit & SACON 2024) Gen AI & Deepfake In Overall Security.pdf
(CISOPlatform Summit & SACON 2024) Gen AI & Deepfake In Overall Security.pdf
 
High Profile Girls Call ServiCe Hyderabad 0000000000 Tanisha Best High Class ...
High Profile Girls Call ServiCe Hyderabad 0000000000 Tanisha Best High Class ...High Profile Girls Call ServiCe Hyderabad 0000000000 Tanisha Best High Class ...
High Profile Girls Call ServiCe Hyderabad 0000000000 Tanisha Best High Class ...
 
Integrating Kafka with MuleSoft 4 and usecase
Integrating Kafka with MuleSoft 4 and usecaseIntegrating Kafka with MuleSoft 4 and usecase
Integrating Kafka with MuleSoft 4 and usecase
 
(CISOPlatform Summit & SACON 2024) Workshop _ Most Dangerous Attack Technique...
(CISOPlatform Summit & SACON 2024) Workshop _ Most Dangerous Attack Technique...(CISOPlatform Summit & SACON 2024) Workshop _ Most Dangerous Attack Technique...
(CISOPlatform Summit & SACON 2024) Workshop _ Most Dangerous Attack Technique...
 
Types of Weaving loom machine & it's technology
Types of Weaving loom machine & it's technologyTypes of Weaving loom machine & it's technology
Types of Weaving loom machine & it's technology
 
Vertex AI Agent Builder - GDG Alicante - Julio 2024
Vertex AI Agent Builder - GDG Alicante - Julio 2024Vertex AI Agent Builder - GDG Alicante - Julio 2024
Vertex AI Agent Builder - GDG Alicante - Julio 2024
 
Introduction-to-the-IAM-Platform-Implementation-Plan.pptx
Introduction-to-the-IAM-Platform-Implementation-Plan.pptxIntroduction-to-the-IAM-Platform-Implementation-Plan.pptx
Introduction-to-the-IAM-Platform-Implementation-Plan.pptx
 
EuroPython 2024 - Streamlining Testing in a Large Python Codebase
EuroPython 2024 - Streamlining Testing in a Large Python CodebaseEuroPython 2024 - Streamlining Testing in a Large Python Codebase
EuroPython 2024 - Streamlining Testing in a Large Python Codebase
 
Evolution of iPaaS - simplify IT workloads to provide a unified view of data...
Evolution of iPaaS - simplify IT workloads to provide a unified view of  data...Evolution of iPaaS - simplify IT workloads to provide a unified view of  data...
Evolution of iPaaS - simplify IT workloads to provide a unified view of data...
 
Data Integration Basics: Merging & Joining Data
Data Integration Basics: Merging & Joining DataData Integration Basics: Merging & Joining Data
Data Integration Basics: Merging & Joining Data
 
Dublin_mulesoft_meetup_Mulesoft_Salesforce_Integration (1).pptx
Dublin_mulesoft_meetup_Mulesoft_Salesforce_Integration (1).pptxDublin_mulesoft_meetup_Mulesoft_Salesforce_Integration (1).pptx
Dublin_mulesoft_meetup_Mulesoft_Salesforce_Integration (1).pptx
 
(CISOPlatform Summit & SACON 2024) Keynote _ Power Digital Identities With AI...
(CISOPlatform Summit & SACON 2024) Keynote _ Power Digital Identities With AI...(CISOPlatform Summit & SACON 2024) Keynote _ Power Digital Identities With AI...
(CISOPlatform Summit & SACON 2024) Keynote _ Power Digital Identities With AI...
 
IPLOOK Remote-Sensing Satellite Solution
IPLOOK Remote-Sensing Satellite SolutionIPLOOK Remote-Sensing Satellite Solution
IPLOOK Remote-Sensing Satellite Solution
 
Step-By-Step Process to Develop a Mobile App From Scratch
Step-By-Step Process to Develop a Mobile App From ScratchStep-By-Step Process to Develop a Mobile App From Scratch
Step-By-Step Process to Develop a Mobile App From Scratch
 
Mastering OnlyFans Clone App Development: Key Strategies for Success
Mastering OnlyFans Clone App Development: Key Strategies for SuccessMastering OnlyFans Clone App Development: Key Strategies for Success
Mastering OnlyFans Clone App Development: Key Strategies for Success
 
Semantic-Aware Code Model: Elevating the Future of Software Development
Semantic-Aware Code Model: Elevating the Future of Software DevelopmentSemantic-Aware Code Model: Elevating the Future of Software Development
Semantic-Aware Code Model: Elevating the Future of Software Development
 
leewayhertz.com-Generative AI tech stack Frameworks infrastructure models and...
leewayhertz.com-Generative AI tech stack Frameworks infrastructure models and...leewayhertz.com-Generative AI tech stack Frameworks infrastructure models and...
leewayhertz.com-Generative AI tech stack Frameworks infrastructure models and...
 
Uncharted Together- Navigating AI's New Frontiers in Libraries
Uncharted Together- Navigating AI's New Frontiers in LibrariesUncharted Together- Navigating AI's New Frontiers in Libraries
Uncharted Together- Navigating AI's New Frontiers in Libraries
 

PMP COST FORMULAE

  • 2. Introduction: o Project Cost Management is the knowledge use for managing costs. It helps to ensure a project is completed within the approved budget o It includes the processes involving in estimating, budgeting and controlling costs o These processes interact with each other and with processes in the other nine knowledge areas as well
  • 3. Developing a Cost/Schedule System: Define work using a WBS Create work and resource schedules Develop a time- phased budget Collect Cost Data (at the work package level) Compute variances o Scope o Work packages o Deliverables o Organization units o Resources o Budgets o Schedule resources to activities o Time-phase work packages into a network o Use work packages included in an activity. Accumulate budgets (PV). o Use work packages included in an activity. Accumulate budgets (PV) o Compute the schedule variance (EV-PV) and the cost variance (EV- AC)
  • 5. Development of Project Baselines: Purposes of a Baseline o It is an anchor point for measuring performance o A planned cost and expected schedule against which actual cost and schedule are measured o A summation of time-phased budgets (cost accounts as summed work packages) along a project timeline What Costs Are Included in Baselines? o Labor, equipment, materials, project direct overhead costs (DOC) Rules for Placing Costs in Baselines o Costs are placed exactly as they are expected to be “earned” in order to track them to their point of origin o Percent Complete Rule o Costs are periodically assigned to a baseline as units of work are completed over the duration of a work package
  • 6. o Project Manager can use the information about the project progress to help control the schedule and cost to assess whether the project is on track through earned value management (EVM) o EVM uses Variance Analysis methodology o Other alternative methods are: o Ask team members for a % of the work completed in each work package or activity o Team member provides a simple “guess” of work performed Earned Value Management (EVM):
  • 7. Methods of Variance Analysis in EVM: Comparing Earned Value oWith the expected schedule value oWith the actual costs Assessing Status of a Project oRequired data elements o Budgeted cost of the work scheduled (PV) o Budgeted cost of the work completed (EV) o Actual cost of the work completed (AC) oCalculate cost and schedule variances o A positive variance indicates a desirable condition, while a negative variance suggests problems or changes that have taken place
  • 8. oCost Variance (CV) oIndicates if the work accomplished using labor and materials costs more or less than was planned at any point in the project oSchedule Variance (SV) oPresents an overall assessment in dollar terms of the progress of all work packages in the project scheduled to date Methods of Variance Analysis in EVM:
  • 9. Project Cost Management: ESTIMATE COST DETERMIN E COST CONTROL COST The process involved in planning, estimating, budgeting, and controlling costs so that the budget can be completed within the approved budget Developing an estimate of costs of the resources needed to complete a project Allocating overall cost estimate to individual work items “cost baseline” Controlling change to project budget PLANNING MONITOR & CONTROL
  • 10. Monitor & Control Costs : CONTROL COST Cost Baseline Project Funding Requirements Performance Reports Work Performance Information Approved Change Requests Project Management Plan Cost Change Control System Performance Measurement Analysis Forecasting Project Performance Reviews Project Performance Software Variance Management Inputs Tools & Techniques Outputs Cost Estimate Updates Cost Baseline Updates Performance Measurements Forecasted Completion Recommended Corrective Action Organizational Process Assets Updates Project Management Plan Updates o Monitor Cost Performance o Ensure that changes are included in cost baseline o Inform stakeholders of authorized changes which impact cost
  • 11. Cost Budget Breakdown: Project ReservesNot Used in Earned Value Calculations Used in Earned Value Calculations Cost Budget Management Reserve Cost Baseline Contingency Reserve Project Control Account Work Package Activity Tasks Project WBS Schedule Work Breakdown Structure Schedule Information Budget Breakdown
  • 13. Terms: EV Earned value for a task is simply the percent complete times its original budget. Stated differently, EV is the percent of the original budget that has been earned by actual work completed. PV The planned time-phased baseline of the value of the work scheduled. An approved cost estimate of the resources scheduled in a time-phased cumulative baseline [BCWS—budgeted cost of the work scheduled]. AC Actual cost of the work completed. The sum of the costs incurred in accomplishing work. [ACWP—actual cost of the work performed]. CV Cost variance is the difference between the earned value and the actual costs for the work completed to date where CV = EV – AC SV Schedule variance is the difference between the earned value and the baseline line to date where SV = EV – PV BAC Budgeted cost at completion. Total budgeted cost of the baseline or project cost accounts. EAC Estimated costs at completion. ETC Estimated costs to complete remaining work. VAC Cost variance at completion. VAC indicates expected actual over- or under-run cost at completion.
  • 14. Terms: Performance Indexes: • Cost Performance Index (CPI) • Measures the cost efficiency of work accomplished to date. • CPI = EV/AC • Scheduling Performance Index (SPI) • Measures scheduling efficiency • SPI = EV/PV • Percent Complete Indexes • Indicates how much of the work accomplished represents of the total budgeted (BAC) and actual (AC) dollars to date. • PCIB = EV/BAC • PCIC = AC/EAC
  • 15. Terms: Index Cost (CPI) Schedule (SPI) >1.00 Under cost Ahead of schedule =1.00 On cost On schedule <1.00 Over cost Behind schedule
  • 17. Cost /Schedule Graphs: SV = EV - PVCV = EV - AC
  • 18. EV Earned Value = EV The value of the work accomplished until this point in time. Cost is as per the original budget. “ As of today, what is the estimated value of the work actually accomplished? “
  • 19. PV Planned Value = PV Planned cost or value of the work to be done until this point in time. “ As of today, what is the estimated value of the work planned to be done? “
  • 20. AC Actual Costs = AC The costs actually incurred to complete the work until this point in time. “ As of today, what is the actual costs incurred for the work accomplished? “
  • 21. BAC Budget At Completion = BAC The total planned value or budget for completing the entire project. “ How much did we budget for the total project? “
  • 22. CV Cost Variance = CV CV = EV - AC o Positive is Under Budget o Negative is Over budget
  • 23. SV Schedule Variance = SV SV = EV - PV o Positive is ahead of schedule o Negative is behind schedule
  • 24. CPI Cost Performance Index = CPI CPI = o We are getting $___ worth out of every $1 spent. o Greater than 1 is good; less than 1 is bad EV AC
  • 25. SPI Schedule Performance Index = SPI SPI = o We are progressing at ___% of the rate originally planned. o Greater than 1 is good; less than 1 is bad EV PV
  • 26. EAC Estimate At Completion = EAC Prediction of what project will cost when completed.. “ What do we currently expect the total project to cost (a forecast)? “ There are 4 types:EAC = AC + Bottom up ETC BAC CPI EAC = AC + (BAC – EV) EAC = EAC = (BAC – EV) (CPI x SPI) Used when the original estimate was flawed Used when there are no variances from BAC. Most common one for exam Used when the current variances are “atypical” of the future Used when the current variances are “typical” of the future
  • 27. ETC Estimate To Complete = ETC From this point on, How much More do we expect it to cost to finish the project ? (a Forecast) How much more will the project cost? ETC = EAC - AC
  • 28. VAC Variance At Completion = VAC As of today, how much over or under budget will we be at the end of the project ? VAC = BAC - EAC
  • 29. TCPI To Complete Performance Index = TCPI In order to stay within budget, what rate must we meet for the remaining work? TCPI = (BAC – EV) (BAC - AC) o It divides the work remaining to be done by the money remaining to do it o Greater than 1 is bad; less than 1 is good