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Microsoft Project 2002
Sessions 5-6
Entering Tasks
During this first session we will enter a set of tasks that comprise building a shed – data sheet will be supplied
Cost Data
The following slides we will go through cost terms and some data
These terms will be used in future weeks
Cost Data Overview
Factors
Earned Value
50/50 Rule
Examples
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
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
Factors
CPI - Cost Performance Index
BCWP/ACWP = CPI
SPI - Schedule Performance Index
BCWP/BCWS = SPI
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%.
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
BCWP - Earned Value
Budget Materials - $50 X 80 = $4000Labor for wall - 4 X 80 X $20 = $6400Labor for set up and tear down - 16 X $20 =
$320Additional Labor - $200Total = $10,920
Budget for WallDay 1Set up – 8 hours$160.
Work on wall 24hours$480Additional LaborSpread amongstthe 11 days$18.18
Materials 24/4 =6
6 X $50 = $300
Total for day =$958.18Feet Done = 6
Day 2
Work on wall 32hours$640Additional LaborSpread amongstthe 11 days$18.18
Materials 32/4 =8
8 X $50 = $400
Total for Day =
$1058.18
Feet Done = 14Cum Cost =$2016.36
Day 3
Work on wall 32hours$640Additional LaborSpread amongstthe 11 days$18.18
Materials 32/4 =8
8 X $50 = $400
Total for Day =
$1058.18
Feet Done = 22Cum Cost =$3074.54
Day 4
Work on wall 32hours$640Additional LaborSpread amongstthe 11 days$18.18
Materials 32/4 =8
8 X $50 = $400
Total for Day =
$1058.18
Feet Done = 30Cum Cost =$4132.72
Day 5
Work on wall 32hours$640Additional LaborSpread amongstthe 11 days$18.18
Materials 32/4 =8
8 X $50 = $400
Total for Day =
$1058.18
Feet Done = 38Cum Cost =$5190.90
Budget for WallDay 6
Work on wall 32hours$640Additional LaborSpread amongstthe 11 days$18.18
Materials 32/4 =8
8 X $50 = $400
Total for Day =
$1058.18
Feet Done = 46Cum Cost =$6249.08
Day 7
Work on wall 32hours$640Additional LaborSpread amongstthe 11 days$18.18
Materials 32/4 =8
8 X $50 = $400
Total for Day =
$1058.18
Feet Done = 54Cum Cost =$7307.26
Day 8
Work on wall 32hours$640Additional LaborSpread amongstthe 11 days$18.18
Materials 32/4 =8
8 X $50 = $400
Total for Day =
$1058.18
Feet Done = 62Cum Cost =$8365.44
Day 9
Work on wall 32hours$640Additional LaborSpread amongstthe 11 days$18.18
Materials 32/4 =8
8 X $50 = $400
Total for Day =
$1058.18
Feet Done = 70Cum Cost =$9423.62
Day 10
Work on wall 32hours$640Additional LaborSpread amongstthe 11 days$18.18
Materials 32/4 =8
8 X $50 = $400
Total for Day =
$1058.18
Feet Done = 78Cum Cost =$10481.80
Budget for WallDay 11
Tear Down - 8 Hours X $20= $160
Work on wall 8 hours$160Additional Labor Spreadamongst the 11 days$18.18
Materials 8/4 = 2
2 X $50 = $100
Total for Day =$438.18
Feet Done = 80Cum Cost = $10919.98
Wall
QuestionHow would you do this budget different?
Actual Construction
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 = ?
BCWP
How would you allocate the budget so you could determine BCWP?
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
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
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
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
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
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
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
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.
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.
S Curves
BCWS
BCWP
ACWP
S Curves
BCWS
BCWP
ACWP
S Curves
BCWS
BCWP
ACWP
S Curves
BCWS
BCWP
ACWP
S Curves
BCWS
BCWP
ACWP
S Curves
BCWS
BCWP
ACWP
S Curves
BCWS
BCWP
ACWP
S Curves
BCWS
BCWP
ACWP
Wall Example Continued
The following Excel example shows how the curves can be used.
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.
50/50 Rule
Task 1 = $50k
Task 2 = $25k
Task 3 = $40k
50/50 RuleTask 1 = $50k: Started so, we have earned $25k
Task 2 = $25k
Task 3 = $40k
BCWP = ?
50/50 RuleTask 1 = $50k: Started so, we have earned $25k
Task 2 = $25k
Task 3 = $40k
BCWP = 25K
50/50 RuleTask 1 = $50k: Started so, we have earned $25k
Task 2 = $25k: Started so have earned $12.5k
Task 3 = $40k
BCWP = ?
50/50 RuleTask 1 = $50k: Started so, we have earned $25k
Task 2 = $25k: Started so have earned $12.5k
Task 3 = $40k
BCWP = $37.5K
50/50 RuleTask 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
Reminders
BCWP can never exceed BCWS
At the end of a project the schedule variance will always equal zero
Cost variance can exceed BCWS
