CIS 5800_Chapter 7

planned value PV

also called the budget, is the portion of the approved total cost estimate planned to be spent on an activity during a given period

estimate at completion EAC

an estimated cost of completing a project based on performance to date

Bottom-up estimates

involve estimating the costs of individual work items or activities and summing them to get a project total

EVM earned value management

is a powerful cost control technique that is unique to the field of project management

cost baseline

is a time-phased budget that project managers use to measure and monitor cost performance

earned value EV

is an estimate of the value of the physical work actually completed

Base line

is the budget figure in the original project plan plus approved changes

Estimated time to complete

Original time estimate/SPI

EV

PV to date * RP

Cost variance CV

CV= EV - AC If cost variance is a negative number, it means that performing the work cost more than planned. If cost variance is a positive number, performing the work cost less than planned

Cost performance index CPI

CPI= EV/AC If the CPI is less than one or less than 100 percent, the project is over budget. If the CPI is greater than one or more than 100 percent, the project is under budget.

Estimate at completion EAC

EAC= BAC/CPI

Schedule performance index SPI

SPI= EV/PV IF SPI of one, or 100 percent, means the project is on schedule. If the SPI is greater than one or 100 percent, then the project is ahead of schedule. If the SPI is less than one or 100 percent, the project is behind schedule

Schedule variance SV

SV =EV - PV A negative schedule variance means that it took longer than planned to perform the work, and a positive schedule variance means that the work took less time than planned

Budget at completion BAC

the original total budget for the project

Parametric estimating

uses project characteristics (parameters) in a mathematical model to estimate project costs

WBS

work break down structure

rate of performance RP

is the ratio of actual work completed to the percentage of work planned to have been completed at any given time during the life of the project or activity

actual cost AC

is the total direct and indirect costs incurred in accomplishing work on an activity during a given period