Chapter 13.6: Performance analysis and earned value management Flashcards
(19 cards)
What is earned value management (EVM)?
A quantitative approach to assessing the performance of a project or any portion of it.
It involves comparing three variables:
- Planned value (PV)
- Actual cost (AC)
- Earned value (EV)
What is meant by planned value (PV)?
A.K.A. Budgeted Cost of the Work Scheduled (BCWS)
The sum cost of all work and apportioned effort scheduled to be completed within a given time period as specified in the original budget.
What is meant by actual cost (AC)?
A.K.A. Actual Cost of the Work Performed (ACWP)
The actual expenditure as of a given time period.
What is meant by earned value (EV)?
A.K.A. Budgeted Cost of the Work Performed (BCWP)
The value of the work performed so far (both fully and partially completed work packages). This value is determined by the original budget.
Thus:
- for a completed work task, EV is the same as PV for that task.
- for a partially completed work task, EV is computed as (the percent complete for the task) x (the budget for that task). Alternatively, it is computed as:
– 50% of the task budget when the task is started, and
– 100% of the task budget when it is completed
What is schedule variance?
SV = EV - PV
- Positive SV suggests the project is ahead of schedule
- Negative suggests the project is behind schedule
What is time variance?
The time difference between when the PV is a certain value X and when the EV is that value X
- It shows approximately how far ahead of / behind schedule the project is
What is cost variance?
CV = EV - AC
- Positive CV indicates an underspending
- Negative CV indicates an overspending
What is schedule performance index (SPI)?
SPI = EV / PV
SPI > 1: ahead of schedule
SPI < 1: behind schedule
The smaller the SPI, the more behind schedule the project
What is cost performance index (CPI)?
CPI = EV / AC
CPI > 1: under budget
CPI <1: over budget
The smaller the CPI, the more over budget
True or False: The project manager must focus on both the project level and the work package level to assess the project status.
True
To determine the sources of variances and places where the project manager can or must act requires scrutiny of costs and performance at the _____ level.
Work package level
True or False: In some projects, the variance limits for project levels are allowed to vary.
True
True or False: For technical performance, only upper variance limits on technical requirements are necessary.
False.
Both upper and lower limits are necessary.
- Lower limits to ensure minimal requirements are met.
- Upper limits to discourage excessive or unnecessary development work.
In general,
Forecasted finish date for task = start date + time remaining
Describe the two ways in which “time remaining” is determined.
And state which of these methods is okay for updating the completion date for the project.
1) Compute as a function of days worked so far and current progress:
time remaining = (percent of time remaining) / (percent progress per day)
where
percent progress per day = (percent of task completed so far) / (days worked on task so far)
2) accept opinion of reputable source - often yields a more accurate estimate
Not one of these methods is okay for updating the project’s completion time (depends on critical path). However, both are okay for updating the completion time of individual tasks.
What is the formula for ETC?
estimated time to complete project = (BAC - EV) / CPI
where BAC = budgeted total cost for project (= total PV at target completion)
What is the formula for EAC?
estimated cost at completion = ETC + AC
What is the difference between EVM and CCPM?
EVM is a cost monitoring and reporting method. It does not distinguish “critical” activities on the schedule.
CCPM is a scheduling tool. It does not address costs.
The two methods occasionally give conflicting signs about the project performance (SPI or TV vs buffer consumption). One way to address this is to
- use EVM for cost tracking and reporting, but
- use buffer consumption and CCPM for resourcing and scheduling decisions
Describe Technical Performance Measurement
It is a method for tracking the history of technical objectives or requirements over time. Its purpose is to provide:
1) a best estimate of current technical performance and progress to date, and
2) an estimate of technical performance at project completion
Both estimates are based upon results from models, simulations, tests, or demonstrations
Describe the steps to perform Technical Performance Measurement
1) Specify technical performance measures that are key indicators for the end-item system (measures must be ties to customer requirements and represent major performance drivers)
2) Periodically during the project, calculate / measure performance and compare to targets. Initial measures are based upon estimates from computation, modelling, and simulation. Later measures are derived from test and demonstration results on actual hardware and software.
3) Plot estimates and actual measures of a technical objective on a chart (shows progress toward achieving objective).
