Earned Value Method

Good one Sonia,



Just will like to add a bit, then make excel file of total quantities & cost with respect to early dates,late date & actual.



Plot the same on graph which gives the over-all trend for the project.



First line shows trend with respect to early dates, 2nd with late date, 3rd actual & 4th forecast to complete which will be in reverse order.



And same way individual packages can be plotted.

Hi,



Since many members requested me for details on Earned value analysis and Schedule Variance & Cost variance, let me put the details here.



Let me explain various terminologies first for those who are not familiar about them nad then how to do it in P3.

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Assume there is a budgeted cost of 10,000/- for a work. As of a specific date (data date), we planned to achive, say 50% progress. So we should have spent 5,000/- by the data date, according to the baseline schedule. So, this 5,000 is known as ’Planned value’ or BCWS (Budgeted cost of work scheduled).



But, assume that the actual progress (PCT) is only 25%. So, for this 25% progress we should spend only 2,500/-. This is the worth of work done or Earned value of the activity or BCWP (Budgeted cost of work performed.



Now, if the actual cost incurred on the activity so far is 4,000/-, we say 4,000/- is the actual cost or ACWP (actual cost of work performed.



Now ’schedule variance’ is the difference between earned value & planned value (BCWP - BCWS). This will show the monetary value of delay. In the above example, it will be

-2,500/- meaning, work is 2,500/- worth delayed.



Cost variance is the difference between Earned value and Actual value (BCWP - ACWP). This will show the cost over run. In the above example it is -1,500/- which means the loss is 1,500 on this work since we spent 40% cost for 25% work.



Schedule perfomance index is the ratio between Earned Value & Planned value (BCWP/BCWS) and Cost perfomance Index is the ratio between Earned value & actual value (BCWP/ACWP).



Now coming to P3..If there is cost loaded on activites, and there is a baseline (target) saved, P3 automatically gives Planned value, earned value, actual value, scheduled variance & cost variance. (actaul cost you may need

to manually record using ’cost window’ of activity, if it is different than earned value). So, getting this report is a matter of bringing the respective columns to the layout..



But P3 doesnt have CPI & SPIs. This we can get by use of custom data items & global change.



Trust the above information is useful.



regards

Sonia

hi sonia,



i would love to receive the details as you provided to nitin.



thanks my email:mohdwaseemsaber@yahoo.com

Nitin,



I got your message..give me your email ID to send details.

Nitin,



There is a very good paper about "Controlling Construction Projects using Earned Value Analysis" on the Planning Engineers Organisation website, by Paul Kidston.



You will find it on this page....



Planning Engineers Organisation - Dissertation Papers



This might help you with your query.



Best wishes.



Gary France

HI,



i think i go with Jaco with regards to the usage of the EVA reports and i presume for the realtime planners the provided heirarchy by Jaco is good enough to take a leaf and built their trees,’



well presented Jaco keep it up



cheers

Well



Earned Value.



Two Type’s



Type 1 = Earned Value Fixed Budget

Type 2 = Earned Value variable Budget.

For Engineering Type project Earned Value Variable Budget is the easiast but it depends on your Contract Type.



6 Methods to Calculate Earned Value



1 = Units Complete

2 = Incremental Milestone

3 = Start Finish

4 = Supervisor Opinion

5 = Cost ratio

6 = Weighted or Equivalent Units



For Engineering Type of Projects I Prefer a Incremental Milestone Method Due to Revision of Dwg/Spec.



For Construction Weighted or Equivalent Units



I Hope this Helps.



PS If this looks like a text book answer you are 50 % right. If you require more info you can PP me or GET SKILLS & KNOWLEDGE OF COST ENGINEERING.



Cheers

The primary purpose to get earned value is to get to know value of work done. The accurcy of EV depends on how accurately you have loaded the cost by sudying distribution of project scope and quantities. After you obtain the EV, it is upto you and requirement of your company/client to analyse by comparing with planned value based on early or late dates, or make a forecast based on current trend or forecst if the trend does not continue. The most desired result is comparision with actual cost for each cost account.



-Zubaer

Hi,



There is another type of comparison - compare ’earned value’ against ’Planned value’ and ’actual value’.



These comparative datas are 2 types - variances (Schedule variance & Cost variance) and Index (Schedule perfomance Index & Cost perfomance index).



If this is what u look for, and if u desire more info on these I can help u..

Nitin,



Comparison of the earned value can done on Early dates, Late dates, Actual & Forecast to complete.



All the four curves plotted on single graph gives the best comparison for the project.