Planning Engineer FZE Project Management & Planning Services and Training

‫بالنينغ إنجينير م م ح‬ ‫خدمات وتدريب إدارة المشروعات والتخطيط‬

Project Management General Definitions

Project Management: According to the Project Management Body of Knowledge,

(PMBOK® Guide), project management is “the application of knowledge, skills, tools, and
techniques to project activities to meet the project requirements.”.
It will benefit the reader immensely to have an understanding of the project management
definitions before undertaking the more detailed process of project management. I will
keep updating this topic to cover all the common definitions in project management.
Therefore, if I missed any definition please write it down as a comment and I will update this
topic accordingly.

Activity Duration:
It’s an estimate of how long each activity in the activity list will take. The estimate can be in
hours, days, or weeks.
OR it is the process of approximating the number of work periods needed to complete an
individual activity with the estimated resources.
Most likely (tM): The duration of the activity, given the resources likely to be assigned, their
productivity, realistic expectations of availability for the scheduled activity, dependencies on
other participants, and interruptions.
Optimistic (tO): The activity duration is based on a best‐case scenario of what is described in
the most likely estimate.
Pessimistic (tP): The activity duration is based on a worst‐case scenario of what is described
in the most likely estimate.

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 Planning Engineer FZE Project Management & Planning Services and Training
‫بالنينغ إنجينير م م ح‬ ‫خدمات وتدريب إدارة المشروعات والتخطيط‬

Milestone:
It is a significant point or event in the project.

Dependencies or Logical Relationships:

Finish‐to‐Start (FS): The initiation of the successor activity depends upon the completion of
the predecessor activity.
Finish‐to‐Finish (FF): The completion of the successor activity depends upon the completion
of the predecessor activity.
Start‐to‐Start (SS): The initiation of the successor activity depends upon the initiation of the
predecessor activity.
Start‐to‐Finish (SF): The completion of the successor activity depends upon the initiation of
the predecessor activity.

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 Planning Engineer FZE Project Management & Planning Services and Training
‫بالنينغ إنجينير م م ح‬ ‫خدمات وتدريب إدارة المشروعات والتخطيط‬

Leads and Lags:

A lead allows an acceleration of the successor activity.
A lag directs a delay in the successor activity.

The free float:

The amount of time that a scheduled activity can be delayed without delaying the early start
date of any immediate successor activity within the network path.

The total float:

The amount of time that a scheduled activity can be delayed without delaying the project
completion date.

Project Schedule:
The project schedule includes at least a planned start date and planned finish date for each
activity.
If resource planning is done at an early stage, then the project schedule would remain
preliminary until resource assignments have been confirmed, and scheduled start and finish
dates are established.
The project schedule can be presented in summary form, sometimes referred to as the
master schedule or milestone schedule, or presented in detail.

Schedule Baseline:
A schedule baseline is a specific version of the project schedule developed from the
schedule network analysis. It is accepted and approved by the project management team as
the schedule baseline with baseline start dates and baseline finish dates.

Budget At Completion (BAC):

This is the first number you think of when you work on your project costs. It’s the total
budget that you have for your project—how much you plan to spend on your project.

Planned % Complete:
If the schedule says that your team should have done 400 hours of work so far, and they will
work a total of 1,000 hours on the project, then your “Planned % Complete” is 40%.

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 Planning Engineer FZE Project Management & Planning Services and Training
‫بالنينغ إنجينير م م ح‬ ‫خدمات وتدريب إدارة المشروعات والتخطيط‬

Planned Value (PV):

This is how much of your budget you planned on using so far. If the BAC is $200,000, and the
schedule says your Planned % Complete is 40%, then the Planned Value is $200,000 × 40% =
$80,000.

Actual % Complete:
Say the schedule says that your team should have done 300 hours of work so far, out of a
total of 1,000. But you talk to your team and find out they completed 35% of the work. That
means the actual % complete is 35%.

Earned Value (EV):

This figure tells you how much your project earned. Every hour that each team member
works adds value to the project. You can figure it out by taking the percentage of the hours
that the team has worked and multiplying it by the BAC. If the total cost of the project is
$200,000, then the Earned Value is $200,000 × 35% = $70,000.

Schedule Performance Index (SPI):

If you want to know whether you’re ahead of or behind schedule, use SPIs. The key to using
this is that when you’re ahead of schedule, you’ve earned more value than planned! So EV
will be bigger than PV. To work out your SPI, you just divide your EV by your PV.

Schedule Variance (SV):

It’s easy to see how variance works. The bigger the difference between what you planned
and what you earned, the bigger the variance. So, if you want to know how much ahead or
behind schedule you are, just subtract PV from EV.

Cost Variance (CV):

This tells you the difference between what you planned on spending and what you spent.
So, if you want to know how much under or over budget you are, take AC away from EV.

Earned Value Management (EVM):

Just one of the tools and techniques in the cost control process, When you use these
formulas, you’re measuring and analyzing how far off your project is from your plan. Take a
look at the formulas one more time (The Earned Value Management formulas):

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 Planning Engineer FZE Project Management & Planning Services and Training
‫بالنينغ إنجينير م م ح‬ ‫خدمات وتدريب إدارة المشروعات والتخطيط‬

Note: If the SPI is below 1, then your project is behind schedule. But if you see a CPI under 1,
your project is over budget!

Benefit-cost ratio (BCR):

This is the amount of money a project is going to make versus how much it will cost to build
it. Generally, if the benefit is higher than the cost, the project is a good investment.

Net present value (NPV):

This is the actual value at a given time of the project minus all of the costs associated with it.
This includes the time it takes to build it and labor as well as materials. People calculate this
number to see if it’s worth doing a project.

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 Planning Engineer FZE Project Management & Planning Services and Training
‫بالنينغ إنجينير م م ح‬ ‫خدمات وتدريب إدارة المشروعات والتخطيط‬

Opportunity cost:
When an organization has to choose between two projects, they are always giving up the
money they would have made on the one they don’t do. That’s called opportunity cost. It’s
the money you don’t get because you chose not to do a project.

Internal rate of return:

This is the amount of money the project will return to the company that is funding it. It’s
how much money a project is making the company. It’s usually expressed as a percentage of
the funding that has been allocated to it.

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