Project Cost and Schedule Control
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The document provides an overview of project cost and schedule control techniques including earned value management and estimating project performance. It demonstrates these concepts through an example of a railway construction project, showing how to calculate earned value, planned value, and estimate completion costs based on the project's current performance. Key metrics discussed include percentage of work, budget, and schedule completed to monitor project status and identify if it is on track or experiencing delays or cost overruns.
Project Cost and Schedule Control
- 1. Welcome to Project cost and schedule control Your trainer is Mike Kerrigan
- 2. Project Management Basics The Project manager is responsible for delivering all three
- 3. Managing the project Plan Act Do Check
- 4. Completed 1.5 km An example How is the project doing? Project: Build 5 km railway End of month 2: Time allowed: 5 months Cost? Budget: ?100,000 Schedule? Completion %?
- 5. Completed 1.5 km An example How is the project doing? End of month 2: Time passed: 40% of duration 1.5 km of railway completed = 30% of requirement Spend to date: ?38,000 = 38% of budget How are we doing? 30/38/40% complete?
- 7. Gantt with baseline and Critical Path
- 8. Milestone chart 17/04/2011 26/02/2011 07/01/2011 SDR Complete Subsys 1 complete 18/11/2010 Subsys 2 complete Subsys 3 complete IVV Complete 29/09/2010 System Delivered Acceptance complete Reference 10/08/2010 21/06/2010 02/05/2010 M0 M1 M2 M3 M4 M5 M6
- 9. Traditional monitoring Cost: ¨C What percentage of the budget has been spent? ¨C What is our estimate to complete? ¨C How much will it cost at completion? 160 140 120 100 Budget 80 ? Actual 60 40 20 0 10 0 2 4 6 8 Month
- 10. Baseline plan Back to the example Embankment Bridge Km 1 Km 2 Km 3 Km 4 Km 5 Budget ?15k Budget ?33k Budget ?15k Budget ?22k Budget ?15k Time 1 mth Time 1.5 mth Time 0.5 mth Time 1.5 mth Time 0.5 mth Project: Build 5 km of railway Budgeted cost: ?100,000 Delivery timescale: 5 months
- 11. Where are we? Schedule end of month 2 Embankment Bridge Km 1 Km 2 Km 3 Km 4 Km 5 Budget ?15k Budget ?33k Budget ?15k Budget ?22k Budget ?15k Time 1 mth Time 1.5 mth Time 0.5 mth Time 1.5 mth Time 0.5 mth Value of work planned to be completed: In month 1 = ?15k In month 2 = (1/1.5 x ?33k) = ?22k Planned value = ?15k + ?22k = ?37k
- 12. Where are we? Schedule end of month 2 Embankment Bridge Km 1 Km 2 Km 3 Km 4 Km 5 Budget ?15k Budget ?33k Budget ?15k Budget ?22k Budget ?15k Time 1 mth Time 1.5 mth Time 0.5 mth Time 1.5 mth Time 0.5 mth Value of work completed: Km1 = ?15k Km2 = 50% of ?33k = ?16.5k Earned value = ?15K + ?16.5k = ?31.5k (31.5% of total value)
- 13. Where are we? Schedule end of month 2 Embankment Bridge Km 1 Km 2 Km 3 Km 4 Km 5 Budget ?15k Budget ?30k Budget ?15k Budget ?25k Budget ?15k Time 1 mth Time 1.5 mth Time 0.5 mth Time 1.5 mth Time 0.5 mth Earned value = ?31.5k = 31.5% Planned value = ?37k = 37% Conclusion: Value of work done is 5.5% less than planned Behind by ?5.5k value of work
- 14. Where are we? Costs end of month 2 Embankment Bridge Km 1 Km 2 Km 3 Km 4 Km 5 Budget ?15k Budget ?30k Budget ?15k Budget ?25k Budget ?15k Time 1 mth Time 1.5 mth Time 0.5 mth Time 1.5 mth Time 0.5 mth Earned value = ?31.5k = 31.5% of budget Actual costs = ?38k = 38% of budget Conclusion: Spent 38% of budget doing 31.5% of the work Overspent by ?6.5k
- 15. How are we doing? 1800 1600 1400 1200 Planned 1000 Actual 800 600 Earned 400 200 0 0 1 2 3 4 5 6 7 8 9 10 11
- 16. How are we doing? 1800 1600 1400 1200 Planned 1000 Actual 800 Earned 600 400 200 0 0 1 2 3 4 5 6 7 8 9 10 11
- 17. Estimate at Complete (EAC) If we continued to perform as we have to date: EAC = Budget x Actual cost Earned
- 18. Change Change! Impact Change in requirements will impact Time and Cost