Cost V.5.0. Jan 07 Cost July 09 1 Control Costs “PMI” is abbreviation for Project Management Institute as well as trade and service mark registered in the United States and other nations; “PMBOK”, is trademarks of the Project Management Institute. Inc.
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Slide 1Control Costs
“PMI” is abbreviation for Project Management Institute as well as trade and service mark registered in the United States and other nations; “PMBOK”, is trademarks of the Project Management Institute. Inc.
PROPRIETARY :
The material in this document are proprietary to Prosys Solutions, all right reserved. Don’t reproduce or distribute without written permission of Prosys Solutions. Copyright © 2003 all rights reserved.
Cost V.5.0. Jan 07
Earned Value
Earned Value represent the amount of budget absorbed that you can claim representing the complete work (cost, time, scope)
Earned Value Analysis / technique is a method of measuring project performance, by comparing the amount of work planned with what was actually accomplished to determine if cost and schedule performance is as planned
Enable the project manager to detect deviations from plan as soon as they occur and to take appropriate corrective action.
Cost V.5.0. Jan 07
Earned Value Technique
The key Values:
Planned Value (PV): Estimated value of the work to be done
Earned value (EV): Estimated value of the work actually accomplished
Actual Cost (AC): Actual cost incurred
Budget at Completion (BAC): Budget for total work
Estimate to Complete (ETC): Current expectation of the remain project cost to finish the job (at certain point)
Estimate at Completion (EAC): Current expectation of the total project cost
Variance at Completion (VAC): Current expectation of how much over or under budget at the end of the project
Cost V.5.0. Jan 07
(+) = under budget
(-) = over budget
(+) = ahead schedule
(-) = behind schedule
<1 performance of cost not OK
Getting Rp xx out of every Rp 1
Schedule Performance Index (SPI): EV/PV
>1 performance of schedule OK
<1 performance of schedule not OK
Progressing at x% of the rate originally plan
Earned Value Technique
Modules will be produced per period
Cost per module = $ 10
Module completion:
A = 100 %
B = 100 %
C = 100 %
D = 100 %
E = 50 %
Module completion:
A = 100 %
B = 100 %
C = 50 %
D = 0 %
E = 0 %
Modules will be produced per period
Cost per module = $ 10
In 3 rd period: $ 40 is expended
Module completion: A=100%, B= 100%, C= 100%, D=100%, E=50%
Earned Value: Illustration (1)
(+) = under budget
(+) = ahead schedule
>1 performance of cost OK
Getting Rp xx out of every Rp 1
Schedule Performance Index (SPI): EV/PV = $45 / $30 = 1.5
>1 performance of schedule OK
Progressing at x% of the rate originally plan
Earned Value: Illustration (2)
In 3 rd period: $ 30 is expended
Module completion: A=100%, B= 100%, C= 50%, D=0%, E=0%
Earned Value: Illustration (3)
(-) = over budget
(-) = under schedule
<1 performance of cost NOT OK
Getting Rp xx out of every Rp 1
Schedule Performance Index (SPI): EV/PV = $25 / $30 = 0.833
<1 performance of schedule NOT OK
Progressing at x% of the rate originally plan
Earned Value: Illustration (3)
EAC = Actual + Remaining Budget = AC + (BAC – EV)
Used when current variances are thought not typical of the future
Sample: = 30 + (50 - 25) = $55
Alternative 2 :
Used when original estimate was fundamentally flawed
Sample: = 30 + xxest = $xx
EAC = Actual + Remaining Budget/CPI = AC + ( [BAC–EV] / CPI )
Used when current variances are thought to be typical of the future
Sample: = 30 + ( [50 - 25] / 0.625 ) = $70
Condition case 2:
EAC = BAC / CPI = 50 / 0.625 = $80
Used when if no variances from the BAC have occurred or will continue at the same rate of spending
Condition case 2:
“PMI” is abbreviation for Project Management Institute as well as trade and service mark registered in the United States and other nations; “PMBOK”, is trademarks of the Project Management Institute. Inc.
PROPRIETARY :
The material in this document are proprietary to Prosys Solutions, all right reserved. Don’t reproduce or distribute without written permission of Prosys Solutions. Copyright © 2003 all rights reserved.
Cost V.5.0. Jan 07
Earned Value
Earned Value represent the amount of budget absorbed that you can claim representing the complete work (cost, time, scope)
Earned Value Analysis / technique is a method of measuring project performance, by comparing the amount of work planned with what was actually accomplished to determine if cost and schedule performance is as planned
Enable the project manager to detect deviations from plan as soon as they occur and to take appropriate corrective action.
Cost V.5.0. Jan 07
Earned Value Technique
The key Values:
Planned Value (PV): Estimated value of the work to be done
Earned value (EV): Estimated value of the work actually accomplished
Actual Cost (AC): Actual cost incurred
Budget at Completion (BAC): Budget for total work
Estimate to Complete (ETC): Current expectation of the remain project cost to finish the job (at certain point)
Estimate at Completion (EAC): Current expectation of the total project cost
Variance at Completion (VAC): Current expectation of how much over or under budget at the end of the project
Cost V.5.0. Jan 07
(+) = under budget
(-) = over budget
(+) = ahead schedule
(-) = behind schedule
<1 performance of cost not OK
Getting Rp xx out of every Rp 1
Schedule Performance Index (SPI): EV/PV
>1 performance of schedule OK
<1 performance of schedule not OK
Progressing at x% of the rate originally plan
Earned Value Technique
Modules will be produced per period
Cost per module = $ 10
Module completion:
A = 100 %
B = 100 %
C = 100 %
D = 100 %
E = 50 %
Module completion:
A = 100 %
B = 100 %
C = 50 %
D = 0 %
E = 0 %
Modules will be produced per period
Cost per module = $ 10
In 3 rd period: $ 40 is expended
Module completion: A=100%, B= 100%, C= 100%, D=100%, E=50%
Earned Value: Illustration (1)
(+) = under budget
(+) = ahead schedule
>1 performance of cost OK
Getting Rp xx out of every Rp 1
Schedule Performance Index (SPI): EV/PV = $45 / $30 = 1.5
>1 performance of schedule OK
Progressing at x% of the rate originally plan
Earned Value: Illustration (2)
In 3 rd period: $ 30 is expended
Module completion: A=100%, B= 100%, C= 50%, D=0%, E=0%
Earned Value: Illustration (3)
(-) = over budget
(-) = under schedule
<1 performance of cost NOT OK
Getting Rp xx out of every Rp 1
Schedule Performance Index (SPI): EV/PV = $25 / $30 = 0.833
<1 performance of schedule NOT OK
Progressing at x% of the rate originally plan
Earned Value: Illustration (3)
EAC = Actual + Remaining Budget = AC + (BAC – EV)
Used when current variances are thought not typical of the future
Sample: = 30 + (50 - 25) = $55
Alternative 2 :
Used when original estimate was fundamentally flawed
Sample: = 30 + xxest = $xx
EAC = Actual + Remaining Budget/CPI = AC + ( [BAC–EV] / CPI )
Used when current variances are thought to be typical of the future
Sample: = 30 + ( [50 - 25] / 0.625 ) = $70
Condition case 2:
EAC = BAC / CPI = 50 / 0.625 = $80
Used when if no variances from the BAC have occurred or will continue at the same rate of spending
Condition case 2:
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