Project management
EDUCATIONAL MATERIAL FOR MASTER'S PROGRAMS
ASSIGNMENTS FOR THE SEMINAR 2.
Topic 5. Project cost management
Presentations and discussion of projects
1. Earned Value and Earned Schedule analysis.
2. S-Curve Representation.
3. Presentation of the project on the questions asked “Project budget” .
Read more information in the attached file Earned Value Management in Projects.pdf
The individual task is performed according to the options (the option is selected by the number of the student's lastname in the group list). See the Initial data in the attached file Initial data SL 2 PM_2023.docx.
Attention. Important!
The option you need to take is the same as for the task “Topic 4. Project schedule management ”. Example: Initial data
Date of calculation of indicators - end of the week number 10 .
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Deliverable
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Work
|
Predecessor work
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Duration (weeks)
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The cost of the work, thousand dollars..
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Responsible for the work
|
Cost accounting rule*
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|
1
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O 1
|
–
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3
|
10
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Department A
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0/100 (1)
|
|
1
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O 2
|
O 1
|
5
|
26
|
Department B
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50/50 (2)
|
|
1
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O 3
|
O 1
|
3
|
40
|
Department D
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50/50 (2)
|
|
2
|
O 4
|
O 1
|
4
|
36
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Department C
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Ratio (3)
|
|
2
|
O 5
|
O 1
|
2
|
18
|
Department D
|
0/100 (1)
|
|
3
|
O 6
|
O 3
|
4
|
24
|
Department A
|
Ratio (3)
|
|
3
|
O 7
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O 4, O 5
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3
|
12
|
Department B
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50/50 (2)
|
|
3
|
O 8
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O 2, O 6, O 7
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2
|
22
|
Department C
|
0/100 (1)
|
*Cost accounting rule:
0/100 (1) – the budgeted cost of work is taken into account at the end of the plan period;
50/50 (2) - the budgeted cost of work is taken into account 50% at the beginning of the period, and 50% at the end of the plan period;
Ratio (3) - the budgeted cost of work is taken into account in equal parts in proportion to the duration. For example, the O4 work lasts 4 weeks, its cost $36 divided into 4 parts of $9.
TASK 1. Earned Value and Earned Schedule analysis.
Step 1.1 Calculate the network diagram using PERT (program evaluation and review technique).
Use the network diagram from task " the PERT method". (Topic 4. Project schedule management).
Example
Fig.1 - The network diagram PERT
Step 1.2. Build a Cost matrix of project responsibility using data on The cost of the work and Responsible for the work
Example:
Fig.2 - Cost matrix of project responsibility
Step 1.3. Build a reference project plan using data on the duration (T), cost of work (BCWS) and Calculated Indicators from PERT diagram (ES, LF, TF). Calculate Total BCWS By Period.
Example:
Fig.3 - The reference project plan
T - duration. ES - Earliest Start , LF - Latest Finish, TF - total float. The planned value (PV), formerly called the budgeted cost of work scheduled (BCWS).
Cost accounting rule:
0/100 (1) - the budgeted cost of work is taken into account at the end of the plan period
50/50 (2) - the budgeted cost of work is taken into account 50% at the beginning of the period, and 50% at the end of the plan period
Ratio (3) - the budgeted cost of work is taken into account in equal parts in proportion to the duration. For example, the O4 work lasts 4 weeks, its cost $36 divided into 4 parts of $9.
Step 1.4. Prepare a project report on the date specified in the task.
For example, the Date of calculation of indicators - end ofthe week number 10 .
Calculate the BCWP on the specified date.
Independently (or in agreement with the teacher) appoint Parameters of the project execution (ACWP) for the specified date. The project cost report is in the form of a table.
Example:
Table - The project report on (the date)
|
Work
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BCWS
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BCWP
|
ACWP
|
CV
|
|
O 1
|
10
|
10
|
12
|
2
|
|
O 2
|
26
|
13
|
20
|
7
|
|
O 3
|
40
|
20
|
31
|
11
|
|
O 4
|
36
|
33
|
31
|
-2
|
|
O 5
|
18
|
18
|
18
|
0
|
|
O 6
|
24
|
|
|
|
|
O 7
|
12
|
|
|
|
|
O 8
|
22
|
|
|
|
|
Total
|
188
|
94
|
112
|
18
|
The budgeted cost of work scheduled (BCWS).
Budgeted cost of work performed (BCWP), also called earned value, is the percentage of work actually completed multiplied by the budget for the activity
EV = Actual % Complete x Total Budget
Budgeted cost of work scheduled (BCWS), also called planned value, is that portion of the approved total cost estimate planned to be spent on an activity during a given period
PV = Planned % Complete x Total Budget
Actual cost of work performed (ACWP), also called actual cost, are the total direct and indirect costs incurred in accomplishing work on an activity during a given period.
AC = Actual Expenses
Cost Variance (CV) = BCWP - ACWP = EV - AC
Defined as the difference between the budgeted cost of work performed and the actual cost of work performed.
A positive CV indicates a lower actual cost than budgeted for the control period, while a negative CV indicates a cost overrun.
TASK 2. S-Curve Representation.
Step 2.1. On the base of the project cost report, draw the S-Curve as shown in the figure 4. Example:
Fig. 4 - The S-Curve Representation of the project
Step 2.2. Calculate Project Variance and Project Performance Indexes.
Read more information in the attached file Earned Value Management in Projects.pdf
Draw the EVM Values Chart as shown in the figure 5. Indicate the result of the calculation in the diagram.
Fig. 5 - EVM Values Chart
TASK 3. Presentation of the project on the questions asked “Project budget”.
For the project under development Build a Cost matrix of project responsibility using data on The cost of the work and Responsible for the work.