BITS Pilani

Pilani Campus

PROGRESS & PERFORMANCE

MANAGEMENT AND EVALUATION
CHAPTER NO 13 TEXTBOOK T1
NEED

• Control holds people accountable

• Prevents small problems from mushrooming into large

problems

• Keeps focused

• Competitive edge

• Effective control through proper information system

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PROJECT MONITORING
INFORMATION SYSTEM
• Determining what data to be collected

• How, when and who will collect the data

• Data analysis

• Reporting current progress

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DATA COLLECTION AND
ANALYSIS
• Actual activity duration
• Resource usage and rates
• Actual costs

• Compare :
– Planned Vs. Actual
– Scheduled Vs. Actual

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• Data To Be Collected By
– Project Team Members
– Individual Cost Engineers
– Project Manager

• Sources
– Cash Flow
– Machine Hours
– Labor Hours
– Materials In Place

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Reports And Reporting
– Progress since last report
– Current status of project
• Schedule
• Cost
• Scope
– Cumulative trends
– Problems and issues since last report
• Action and resolution of earlier problems
• New variances and problems identified
• Corrective action planned

BITS Pilani, Pilani Campus

PROJECT CONTROL
PROCESS
• Setting the baseline plan

• Monitoring progress and performance

• Comparing Plan vs. Actual

• Taking actions

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MONITORING TIME
PERFORMANCE
• Preparing Gantt Chart
– List the activities with duration
– Predecessor Relationship
– Critical Path
– Tracking Gantt Chart
• Progress
• Slippages
• Slack

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EARNED VALUE
COST/SCHEDULE SYSTEM

Time Phased Budget Baseline

Comparisons With Actual And Planned Schedule And Cost
EV: Earned Value (BCWP)
PV: Planned Value (BCWS)
AC: Actual Cost (ACWP)
CV: Cost Variance SV: Schedule Variance
BAC: Budgeted Cost at Completion
ETC: Estimated Cost to Complete Remaining Work
EAC: Estimated Cost at Completion
VAC: Cost Variance at Completion

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BITS Pilani, Pilani Campus
COST VARIANCE CV = EV – AC
SCHEDULE VARIANCE SV = EV – PV
TIME VARIANCE TV = ST – AT
VAC = BAC - EAC

CV : IF NEGATIVE : OVERRUN
SV : IF NEGATIVE : BEHIND SCHEDULE
TV: DELAY IS NEGATIVE

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BITS Pilani, Pilani Campus
INTEGRATED COST
SCHEDULE SYSTEM
Define The Work Using WBS
– Scope
– Work Progress
– Deliverables
– Organization Units
– Resources
– Budgets For Each Work Package

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• Develop work and resource schedule
– Schedule resources to activities
– Time-phase work packages into network

• Develop time phased budget using work packages and

determine planned budgeted cost of the work scheduled
• At work package level, collect actual costs for the work
performed.
• Collect percent completion and compute budgeted cost
of work performed : earned value

BITS Pilani, Pilani Campus

TIME PHASED BUDGET

• To measure overall performance by using aggregate

performance measure called earned value

• To compare the actual and scheduled cost with planned

• Earned value is calculated by multiplying the estimated

percent physical completion of work for each task by the
planned cost for those tasks

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WAYS TO CALCULATE
PERCENT COMPLETION
• The 50-50 estimate: fifty percent completion is assumed
when the task is begun and remaining fifty percent when
the work is complete
• The 0-100 percent rule: this rule allows the credit of work
until the task is complete
• Critical input use: this rule assigns task progress
according to the amount of critical input that has been
used
• The proportionality rule: this rule divides actual task time
to date by total scheduled task time to calculate percent
complete

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VARIANCE ANALYSIS

• Comparing earned value with the expected schedule

value

• Comparing Earned Value With The Actual Costs

• CV = EV- AC If Negative, Overrun

• SV = EV – PV If Negative Behind Schedule

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DEVELOPING A STATUS
REPORT
• Baseline Development

• Development Of Status Report

– Not Yet Started
– Finished
– In Process Or Partially Complete

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PERFORMANCE INDEX
• CPI = EV / AC

• SPI = EV / PV

INDEX CPI SPI

>1.00 UNDER RUN AHEAD OF
SCHEDULE
=1.00 ON COST ON SCHEDULE
<1.00 OVER RUN BEHIND SCHEDULE
PROJECT PERCENT
COMPLETE INDEX
• Percent complete index PCIB = EV / BAC

• PCIB represents the work accomplished as percent of

the total budgeted dollars to date

• Percent complete index PCIC = AC / EAC

• PCIC represents percent complete in terms of actual

dollars spent to accomplish work to date and the actual
expected dollars for the completed project

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FORECASTING FINAL
PROJECT COST
EAC = AC + ETC

ETC = WORK REMAINING / CPI

= (BAC – EV) / EV/AC

TCPI : TO COMPLETE PERFORMANCE INDEX (TCPI)

TCPI = (BAC – EV) / (BAC – AC)

It measures the amount of value each remaining dollar in
the budget must earn to stay within budget

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Problem no. 1

• A project to develop a country park has an actual cost in

month 17 of $350,000, A planned cost of $450,000, and
A value completed of $300,000. Find the cost and
schedule variances and the three indices.

• GIVEN : AC = 350,000 PV = 450,000

EV = 300,000
• COST VARIANCE = EV – AC

• CV = 300,000 – 350,000 = -50,000 OVERRUN

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• SCHEDULE VARIANCE = EV – PV = 300,000 – 450,000
= -150,000 BEHIND SCHEDULE

• CPI = EV/ AC = 300,000/350,000 = 0.857

• SPI = EV / PV = 300,000 / 450,000 = 0.666

• CSI = CPI X SPI = 0.857 X 0.666 = 0.571

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PROBLEM NO. 2

• A project to develop technology training seminars is 5

days behind schedule at day 65. It had a planned cost of
$735,000 for this point in time, but the actual cost is only
$550,000. Estimate the schedule and cost variances.

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SOLUTION 2

GIVEN PV = 735,000 AC = 550,000 EV = 60/65 *

735,000 = 678,462

COST VARIANCE = EV – AC = 678,462 – 550,000 =

128,462 UNDERRUN

SCHEDULE VARIANCE = EV – PV = 678,462 – 735,000 =

- 56,538 BEHIND SCHEDULE

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PROBLEM NO. 3
• For the following test marketing project at week 6,
calculate the cost schedule and time variances. Also
calculate the CPI, SPI, CSI, ETC AND EAC.

ACTIVITY PREDECE DURATI BUDGET ACTUAL %

SSOR ON COST COMPLE
TE
A - 2 300 400 100
B - 3 200 180 100
C A 2 250 300 100
D A 5 600 400 20
E B,C 4 400 200 20
SOLUTION 3
A PV 150 150
EV 150 150
B 100 100
100 100
C 125 125
125 125
D 300 300
300
E 200 200
200
TOTAL 250 150 525 125 200 0 300 200
: PV
CUM. 250 400 925 1050 1250 1250 1550 1750
AC 0 400 180 300 0 0
CUM. 0 400 580 880 880 880
EV 250 150 525 125 200 0
CUM. 250 400 925 1050 1250 1250
ON DAY 6

EV = 1250

PV = 1250

AC = 880

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• COST VARIANCE : EV – AC = 1250 – 880 = 370
UNDERRUN
• SCHEDULE VARIANCE = EV – PV = 1250 – 1250 = 0
ON SCHEDULE

• CPI = EV/AC = 1250 / 880 = 1.42

• SPI = EV/PV = 1250 / 1250 = 1.00

• CSI = 1.42 X 1.00 = 1.42

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• BAC = 1750 EV = 1250 CPI = 1.42

• ETC = (BAC – EV) / CPI = (1750 – 1250) / 1.42 = 352

• EAC = ETC + AC = 352 + 880 = 1232

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