16-10-2017

Assignment 6:
Monitoring and Earned
Value Analysis

CT3101 BASISAPSECTEN PROJECTMANAGEMENT

GROUP 9B
MIKE MORITZ - 4287932
LISE ANDRINGA - 4454952

TU DELFT Minor Project Management: from Nano to Mega

1. S-curve:
a/b. The S-curve of the actual costs of this project plotted in the same figure with the S-curve of
the baseline planned budget of this project:

S-Curve and Earned Value

1800

1600

1400

1200
CUMULATIVE COST M£

1000
EV
800
Predicted Cost
600 Real Cost
400

200

0
0 20 40 60 80 100
-200
MONTHS FROM 1 JANUARY 2007 ONWARDS

Figure 1: S-curve Queensferry Crossing Bridge of the actual cost and the baseline planned budget

We assumed that all the activities started at their early start and finish at their early finish, except for the actual
costs where the delays were taken into account. For the budgeted costs following that start have been equally
distributed over the months that the activity was to take. For the actual costs the same method was applied for
the completed tasks.

For the tasks that were yet to be completed or were according the WBS yet to start, while still having costs
allocated to them the costs have been applied at locations where they would make the most sense. For
example: the costs applied to the construction of the road access has been added to the preparatory works for
the bridge as we assumed that the resources needed were bought at the same time in bulk. The total amount of
data points used in the graph is 106.

2. The Earned Value Analysis:

a. The Earned Value to date of this project calculated with the 0/100% rule:
0
𝐸𝑉 ( %) = 0.45 + 4 + 1.2 + 1 + 1 + 1.5 + 0.6 + 0.2 + 17 + 155 = 181,95 𝑀£
100

The Earned Value to date of this project calculated with the 50/50% rule:
50
𝐸𝑉 ( %) = 0.45 + 4 + 1.2 + 1 + 1 + 1.5 + 0.6 + 0.2 + 17 + 155 + 0.5 ∗ (20 + 200 + 170 + 73 + 120
50
+ 186 + 168) = 650,45 𝑀£

The Earned Value to date of this project calculated with the proportionality rule:
𝐸𝑉(𝑝𝑟𝑜𝑝𝑜𝑟𝑡𝑖𝑜𝑛𝑎𝑙𝑖𝑡𝑦 𝑟𝑢𝑙𝑒) = ∑(% 𝑜𝑓 𝑐𝑜𝑚𝑝𝑙𝑒𝑡𝑖𝑜𝑛 ∗ 𝐵𝑢𝑑𝑔𝑒𝑡𝑒𝑑 𝐶𝑜𝑠𝑡) = 369.7 𝑀£
b. The differences between the three calculated Earned Values.
When the Earned Value to date of this project is based on the 0/100% rule, the activity will only contribute to
the earned value if is totally completed, otherwise it is ignored. This makes it a very conservative way of
counting, more often applied to smaller projects with more egalitarian budgets.

In contrast of that, the 50/50% rule is based on the fact that if it is started, it is assumed to be 50% complete.
The benefits of this are that when the activity is small, it gives a reasonably accurate estimate, however with
large sub-tasks it will result in a grossly overestimated earned value as can be seen in the calculation above.

Beside of these 2 rules mentioned above there is the proportionality rule. In this rule the earned value to date is
counted as percentage of work that is done.

c. The possible Earned Value curve based on the proportionality rule in the same
chart as the S-curve of task 1.
For the EV plot please see the blue line in figure 1.

3. Variances:
In this assignment the earned value used is the earned value to date.

a. Calculate the CV (cost variance), the SV (schedule variance).

𝐶𝑉 = 𝐸𝑎𝑟𝑛𝑒𝑑 𝑣𝑎𝑙𝑢𝑒 – 𝑎𝑐𝑡𝑢𝑎𝑙 𝑣𝑎𝑙𝑢𝑒 = 369.7 − ∑ 𝑎𝑐𝑡𝑢𝑎𝑙 𝑐𝑜𝑠𝑡𝑠 = −340.65 𝑀£

𝑆𝑉 = 𝐸𝑎𝑟𝑛𝑒𝑑 𝑣𝑎𝑙𝑢𝑒 − 𝑝𝑙𝑎𝑛𝑛𝑒𝑑 𝑣𝑎𝑙𝑢𝑒 = 369.7 − ∑ 𝐵𝑢𝑑𝑔𝑒𝑡𝑒𝑑 𝐶𝑜𝑠𝑡 𝑡𝑜 𝑑𝑎𝑡𝑒 = −252.25 𝑀£

b. Are there actions necessary based on the current status (variances) of the project?
As can be seen in the calculations the project is late and overspend, hence actions need to be undertaken in
order to steer the project back on track.

The project manager will need to find a way to cut costs for the remainder of the project without further
causing delays. This can be done in a multitude of ways.

 Renegotiation of contracts: The contacts can be adjusted with renegotiation by for example taking on
extra risks of the contractors, in exchange for a lower price. This move while risky is capable of
significantly reducing budgetary requirements.
 Purchasing cheaper resources: By entering a cheaper market the costs can be drastically reduced,
however this may have a negative effect on the quality and possibly the lifetime of the construction,
thereby possibly impeding on the success criteria of the project.

It is very hard to improve on the schedule without also running into extra costs. Therefore one can focus on
bringing the schedule back at the cost of extra expenses or reorganize the schedule.

 Make a new planning: One can adjust the overall timetable of the project to include the expected extra
time in order to get the planning back on track. This is more of an administrative tool helping with the
flow and the overview of the project, not actually fixing the problem.
 Reorganize the project: By reorganization the remaining tasks can be scheduled more efficiently within
the remaining time.
 Increase working efficiency: In the case that there are lost workhours it is imperative that this is acted
upon. The time lost by accidents can for example be made up for by scheduling regular safety checks.
This will while initially requiring a little bit of time, in the long run a lot of lost workhours due to
incidents can be prevented giving a net gain in time.
In the end the actions chosen and available are dependent on the business climate the project is currently
situated. To make a good estimation of the choices available detailed data on for example factors such as the
current stakeholder opinion. It is very hard to find the perfect measure when a project is late and overspend.
Most measures will result in a loss of quality or new risks appearing. Alternatively the project managers can
choose to prioritise normalizing the budget or schedule over the other. This would result in a whole range of
new possibilities being available, which can only accurately be determined with more current data available.

4. What would be your estimation of the Estimated Cost at Completion (EAC), based on the S-
curve of the actual cost?
𝐸𝑉 𝑡𝑜 𝑑𝑎𝑡𝑒 369.7
𝐶𝑜𝑠𝑡 𝑝𝑒𝑟𝑓𝑜𝑟𝑚𝑎𝑛𝑐𝑒 𝑖𝑛𝑑𝑒𝑥 (𝐶𝑃𝐼) = = = 0.52
∑ 𝐴𝑐𝑡𝑢𝑎𝑙 𝑐𝑜𝑠𝑡𝑠 710.35
∑ 𝐵𝑢𝑑𝑔𝑒𝑡𝑒𝑑 𝑐𝑜𝑠𝑡𝑠 1554.95
𝐸𝑠𝑡𝑖𝑚𝑎𝑡𝑒𝑑 𝐶𝑜𝑠𝑡 𝑎𝑡 𝐶𝑜𝑚𝑝𝑙𝑒𝑐𝑎𝑡𝑖𝑜𝑛 (𝐸𝐴𝐶) = = = 2987.716 𝑀£
𝐶𝑃𝐼 0.52