Cost Management - NetCom Learning

Report
Project Management Professionals
Hot Topics & Challenges - Cost Management
Presenter: Sohel Akhter, PMP, CCNA,ISMS
PMP and Six Sigma instructor, Netcom Learning
Adjunct Professor , MBA program, CUNY
PMP Bootcamp , Sohel Akhter (PMP, ISMS, CCNA) - [email protected], 347-536-2811
1
Project Management Professionals
Hot Topics & Challenges - Cost Management
1. PV
2. EV
3. AC
Variance Formulas:
4. SV = EV – PV
5. CV = EV - AC
Index Formulas:
6. SPI =EV/PV
7. CPI = EV/AC
Forecasting Formulas:
8. BAC
9. EAC = BAC/CPI
10. ETC = EAC - AC
11. VAC = BAC - EAC
12. TCPI = (BAC – EV) / (BAC – AC)
or (BAC – EV)/ (EAC – AC)
PMP Bootcamp , Sohel Akhter (PMP, ISMS, CCNA) - [email protected], 347-536-2811
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Project Management Professionals
Hot Topics & Challenges - Cost Management
New Name
Old Name
Planned
Value
Earned
Value
Actual Cost
Budgeted
Cost of
Work
Scheduled
Budgeted
Cost of
Work
Performed
Actual
Cost of
Work
Performed
PMP Bootcamp , Sohel Akhter (PMP, ISMS, CCNA) - [email protected], 347-536-2811
3
PV
or
BCWS
Planned Value
or
Budgeted Cost of Work Scheduled
BAC x (Time Passed /Total Scheduled Time)
or
BAC x Planned % Complete
EV
or
BCWP
Earned Value
or
Budgeted Cost of Work Performed
BAC x (Work Completed /Total Work Required)
or
BAC x Actual % Complete
AC
or
ACWP
Actual Cost
or
Actual Cost of Work Performed
What is the estimated value of the work planned to be done?
Project Cost Management – Formula
What is the estimated value of the work actually accomplished?
What is the actual cost incurred for the work accomplished?
SV
Schedule Variance
SV = EV- PV
CV
Cost Variance
CV = EV – AC
CPI
Cost Performance Index
CPI= EV/AC

Cumulative CPI
 =  /
SPI
Schedule Performance Index
SPI= EV/PV

Cumulative SPI
 =   / 
BAC
Budget at Completion
EAC
Estimate at Completion
A comparison of amount of work performed during a given period of time to
what was scheduled to be performed.
Negative = behind schedule
Neutral = on schedule
Positive = ahead of schedule
A comparison of the budgeted cost of work performed with actual cost.
Negative= over budget
Neutral = on budget
Positive= under budget
It measures the value of the work completed against actual cost.
CPI<1=over budget
CPI >1= under budget
CPI= 1= on budget
It represents the cumulative CPI of the project at the point the measurement
is taken.
It measures the progress to date against the planned progress.
SPI<1 = behind schedule
SPI > 1= ahead of schedule
SPI = 1 = on schedule
It represents the cumulative SPI of the project at the point the measurement
is taken.
How much did we BUDGET for the TOTAL project effort?
If CPI is expected to be the same
EAC= BAC/CPI
What do we currently expect the TOTAL project to cost?
If current variances are thought to be atypical of the future
EAC = AC+ (BAC-EV)
If both CPI and SPI influence the remaining work
EAC = AC+[ (BAC-EV)/ (CPI x SPI)]
ETC
Estimate to Complete
ETC= EAC - AC
VAC
Variance at Completion
VAC= BAC - EAC
TCPI
To Complete Performance Index
If targeting the current plan
TCPI=
(BACEV)/ BAC
– AC PMP Bootcamp , Sohel Akhter
(PMP,
ISMS,
CCNA)
If targeting the current EAC
From this point on, how much MORE do we expect it to cost to finish the
project?
How much over or under budget do we expect to be at the end of the
project?
Performance that must be achieved in order to meet financial or schedule
goals.
[email protected],
347-536-2811
4
TCPI >1 = harder to complete
TCPI<1 = easier to complete
Project Management Professionals
Hot Topics & Challenges - Cost Management
Project
Planned
End Date
Corporate Training Project
End of 4th
week
Planned
Budget
$10,500 for
total project
$2625 for
each
module
Actual
Amount
Spent by
week Three
$9000
Planned
Completion by
week three
3 out of 4 modules
Actual Completion
2 out of 4 modules
PV
Planned Value
BAC x ( Time Passed /Total Scheduled Time)
= $10,500 x (3/4)
= $10,500 x .75
= $7875
EV
Earned Value
BAC x (Work Completed /Total Work Required)
= $10,500 x (2/4)
= $10,500 x .5
= $5250
PMP Bootcamp , Sohel Akhter (PMP, ISMS, CCNA) - [email protected], 347-536-2811
5
Project Management Professionals
Hot Topics & Challenges - Cost Management
You have a project to build a new fence. The fence is four sided as shown.
Each side is to take one day to build and is budgeted for #1000 per side. The
sides are planned to be completed one after another. Today is the end of day
three. Using the project status chart below calculate the formulas.
Activity
Status End of
day 3
Side 1
Complete, Spent
$1000
Side 2
Side 3
Complete, Spent
$1200
50% done, Spent
$600
PV
3000
EV
2500
AC
2800
BAC
4000
CV
-300
.893
CPI
SV
Side 4
Net yet started
SPI
-500
.833
ETC
4479
1679
VAC
-479
TCPI
1.25
EAC
PMP Bootcamp , Sohel Akhter (PMP, ISMS, CCNA) - [email protected], 347-536-2811
6
Project Management Professionals
Hot Topics & Challenges- Cost Management
You have a project to build a new fence. The fence is four sided as shown.
Each side is to take one day to build and is budgeted for $1000 per side. The
sides are planned to be completed one after another. Today is the end of day
three. In this case, assume that the sides have a finish-to-finish relationship
instead of a finish-to-start relationship.
Using the project status chart below calculate the formulas. What is
Answer
Activity
Status End of
day 3
Side 1
Complete, Spent
$1000
Side 2
Complete, Spent
$900
Side 3
50% done, Spent
$1000
Side 4
75% done, Spent
$300
Key S= Actual Start, F = Actual Finish, PS = Planned Start, PF = Planned Finish
PV
3000
EV
3250
AC
3200
BAC
4000
CV
50
CPI
SV
1.016
250
SPI
1.083
EAC
3937
ETC
VAC
TCPI
PMP Bootcamp , Sohel Akhter (PMP, ISMS, CCNA) - [email protected], 347-536-2811
737
63
.937
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Project Management Professionals
Hot Topics & Challenges - Cost Management
Your project is running well. In the latest earned value report, you see the
CPI=1.2, the SPI= 0.8, the PV= $600,000 and the SV = -$120,000. You can’t
find the CV in the report, so you calculate it based on the info given. What is
the CV?
Key S= Actual Start, F = Actual Finish, PS = Planned Start, PF = Planned Finish
PMP Bootcamp , Sohel Akhter (PMP, ISMS, CCNA) - [email protected], 347-536-2811
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