1. Microsoft Project 2002 Sessions 5-6

2. Entering Tasks During this first session we will enter a set of tasks that comprise building a shed – data sheet will be supplied

3. Cost Data The following slides we will go through cost terms and some data These terms will be used in future weeks

4. Cost Data Overview Factors Earned Value 50/50 Rule Examples

5. Factors BCWS - Budgeted Cost Work Scheduled - Budget entry numbers ACWP - Actual Cost Work Performed - Actuals, what you spent BCWP - Budgeted Cost Work Performed - Earned Value, what you have accomplished

6. Factors BAC - Budget at Completion - the total of all the budget numbers, the bottom line EAC - Estimate at Completion - based on your rate of expenditures, what you probably will spend by the end of the project CV - Cost Variance, BCWP - ACWP = CV SV - Schedule Variance, BCWP - BCWS = SV

7. Factors CPI - Cost Performance Index BCWP/ACWP = CPI SPI - Schedule Performance Index BCWP/BCWS = SPI

8. BCWP - Earned Value Calculating Earned Value should be easy if you set up your budget correctly. Earned Value or BCWP is the value of what you have produced. If you have produced $500,000 worth of the $1,000,000 project, your BCWP is $500,000 or 50%.

9. BCWP - Earned Value Let’s use a wall as an example:  There are $50 per foot in materials  It will take 4 labor hours per foot to build at $20/hour  There will be $200 in other labor charges  There is a crew of four working  The wall is 80 feet long  On the first and last days the crew has 8 hours of set up and tear down time each

10. BCWP - Earned Value Budget  Materials - $50 X 80 = $4000  Labor for wall - 4 X 80 X $20 = $6400  Labor for set up and tear down - 16 X $20 = $320  Additional Labor - $200  Total = $10,920

11. Budget for Wall

14. Wall Question  How would you do this budget different?

15. Actual Construction

16. Actuals For Wall Day 1 Set up – 6 hours 10 feet done Materials - 10 X $50 = $500 Labor = $18.18 +(32 X $20) = $668.18 Total = $1168.18 BCWS = $958.18 ACWP = $1168.18 BCWP = ?

17. BCWP How would you allocate the budget so you could determine BCWP?

18. BCWP Easiest is to take total costs and prorate over some easy thing to measure, like the length of the wall. $10,920/80 = $136.50 / foot completed

19. Actuals For Wall Day 1 Set up – 6 hours 10 feet done or a value of (10 X $136.50) = $1365.00 or $1365.00/10,920 complete = 12.5% complete Materials - 10 X $50 = $500 Labor = $18.18 +(32 X $20) = $668.18 Total = $1168.18 BCWS = $958.18 ACWP = $1168.18 BCWP = $1365.00

20. Actuals for Wall - Day 1 BCWS = $958.18 ACWP = $1168.18 BCWP = $1365.00 CV = BCWP - ACWP = 1365.00 - 1168.18 = $196.82 Positive so it is favorable SV = BCWP - BCWS = 1365.00 - 958.18 = $406.82 Positive so it is favorable CPI = BCWP/ACWP = 1365/1168.18 = 1.168 or for every dollar that is spent, we earn $1.17 in value SPI = BCWP/BCWS = 1365/958.18 = 1.42 or we are doing about 40% better on schedule than anticipated. EAC = BAC/CPI = $10,920/1.17 = $9333.33

21. Actuals For Wall Day 2 It rained - no work performed Labor = $18.18 +(32 X $20) = $668.18 Total = $668.18 BCWS = $2016.36 ACWP = $1836.36 BCWP = $1365.00

22. Actuals for Wall - Day 2 BCWS = $2016.36 ACWP = $1836.36 BCWP = $1365.00 CV = BCWP - ACWP = 1365.00 - 1836.36 = - $471.36 Negative so it is unfavorable SV = BCWP - BCWS = 1365.00 - 2016.36 = - $651.35 Negative so it is unfavorable CPI = BCWP/ACWP = 1365/1836.36 = 0.74 or for every dollar that is spent, we earn $0.74 in value SPI = BCWP/BCWS= 1365/2016.36 = 0.67 or we are doing much worse than we budgeted EAC = BAC/CPI = $10,920/0.74 = $14756.76

23. Actuals For Wall Day 3 Sunny day, crew motivated, did 14 feet today. Materials = 14 X $50 = $700 Total Done = 24 BCWP = 24 X 136.50 = $3276.00 Labor = $18.18 +(32 X $20) = $668.18 Total = $1368.18 BCWS = $3074.54 ACWP = $ 3204.54 BCWP = $3276.00

24. Actuals for Wall - Day 3 BCWS = $3074.54 ACWP = $ 3204.54 BCWP = $3276.00 CV = BCWP - ACWP = 3276.00 - 3204.54 = $71.46 Positive so it is favorable SV = BCWP - BCWS = 3276.00 - 3074.54 = $201.46 Positive so it is favorable CPI = BCWP/ACWP = 3276/3204.54 = 1.02 or for every dollar that is spent, we earn $1.02 in value SPI = BCWP/BCWS= 3276/3074.54 = 1.06 or we are doing much worse than we budgeted EAC = BAC/CPI = $10,920/1.02 = $10,705.89

25. S - Curves Ok, so now we can calculate the statistics Next we want to be able to graph the numbers and see where we are from a visual perspective.

26. S Curves S Curves are a good way to see at a glance what is going on. The following curve shows our data on a graph.

27. S Curves BCWS BCWP ACWP

28. S Curves BCWS BCWP ACWP

29. S Curves BCWS BCWP ACWP

30. S Curves BCWS BCWP ACWP

31. S Curves BCWS BCWP ACWP

32. S Curves BCWS BCWP ACWP

33. S Curves BCWS BCWP ACWP

34. S Curves BCWS BCWP ACWP

35. Wall Example Continued The following Excel example shows how the curves can be used.

36. 50/50 Rule Frame has an easier way to calculate earned value. It is called the 50/50 rule. With this rule, you earned 50% of the earned value the instant you start a task and the other 50% when the task is complete.

37. 50/50 Rule Task 1 = $50k Task 2 = $25k Task 3 = $40k

38. 50/50 Rule Task 1 = $50k: Started so, we have earned $25k Task 2 = $25k Task 3 = $40k BCWP = ?

39. 50/50 Rule Task 1 = $50k: Started so, we have earned $25k Task 2 = $25k Task 3 = $40k BCWP = 25K

40. 50/50 Rule Task 1 = $50k: Started so, we have earned $25k Task 2 = $25k: Started so have earned $12.5k Task 3 = $40k BCWP = ?

41. 50/50 Rule Task 1 = $50k: Started so, we have earned $25k Task 2 = $25k: Started so have earned $12.5k Task 3 = $40k BCWP = $37.5K

42. 50/50 Rule Task 1 = $50k: Finished so, we have earned $50k Task 2 = $25k: Started so have earned $12.5k Task 3 = $40k: Started so we have earned $20k BCWP = $82.5K

43. Reminders BCWP can never exceed BCWS At the end of a project the schedule variance will always equal zero Cost variance can exceed BCWS