Driver Trett Digest Issue 26 - Flipbook - Page 5


DIGEST | ISSUE 26
DEFINITION OF MAIN PARAMETERS
It may sound complicated, but the main parameters or
data points/metrics required for the analysis are low in
number and can be counted on the fingers of one hand.
This measurement system uses the scheduled amount
of work (Planned Value) with the achieved amount of
work (Earned Value) at a point in time,3 then measures
the Earned Value against the cost (Actual Cost) of
achieving that work. With these three data points one
can calculate the true performance of the project and a
trend analysis can be drawn of where the project might
be heading to...
In simple terms:
(i) Planned Value (PV) also called Budgeted Cost of
Work Scheduled (BCWS) is the initial plan for the work
to be completed, otherwise known as the budget.
(ii) Earned Value (EV) also known as Budgeted Cost of
Work Performed (BCWP) is the proportion of the budget
that has actually been done, i.e., what is physically
complete (% of the Plan).
Figure 1. EV Graph including Trend Analysis
(iii) Actual Cost (AC) also known as Actual Cost of
Work Performed (ACWP) is the true cost of the work
completed to date, in financial terms the sum of all the
costs actually accrued for a project to date.
For true project control enthusiasts and subsequently
for a project’s management, the forecasting
indicators (Figure 2) can be even more valuable as
they show that if no corrective or mitigating actions
are taken, the project may be late with an associated
cost overrun.
Figure 1 shows the correlation between the three
metrics in terms of variances and indices. The first and
foremost important one is Schedule Variance (SV) = EV
– PV and it represents how much the project is ahead
(when SV>0) or behind (when SV
0) or over (CV
Powered by
Paperturn flipbook viewer
Page 4 of 36
Print

Download as PDF

Print
