Earned value analysis worked example

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so in this video we're looking at a full example for earned value analysis so as always we'll always have a table of dependencies but in this case we're actually given a field report of what's actually happened in our project at the end of some day at the end of day seven so first of all let's go ahead and draw our Gantt chart so first of all we'd have activity a it's at the beginning of the project because as no predecessor and its duration is two days so we'll draw an activity a just like that tivity be its predecessors a and it's three days long so it will start here and go one to three days out activity C depends on B and it's three days so we'll have activity C one two three just like that activity D also depends on B and it's two days long so we find the end of B not D and go out for two days and then activity e depends on D and it's three days long so we will start here and go one two three so this is what we would expect to happen based on our plan from our original table of dependencies but we have received this field report at the end of day seven from our field manager so we're going to find day seven here and we'll put this in I will put a line in here this is our field report date and our field report is saying that activity a by that by the end of day seven activity a is 100% complete so it's already being done and that's that's good we expected that to be finished on day two this doesn't actually say when it was completed but at least we know it is complete it also says activity B is complete so again we know the activity B is complete doesn't exactly say when it finished but that's great we know it's done activity C is 33% complete so that means that activity C is expected to take three days of work but they've only actually finished up until this point here right they finished a third or 33% of the activity and its cost son and it also has about incured costs of the activities which may or may not match up with the planned costs okay activity D 50% has been completed by the end of day seven so we were expecting activity D to be fully completed here based on our original plan but they're saying only 50% has been completed so only up until this line that amount we can even shade this in this amount of activity D has been completed and this amount of activity C has been completed and activity e hasn't started yet and that was to be expected but also good just to notice that we're not ahead of schedule by having already started activity e so now what we can do is we can go ahead and start filling out all the information in this table so the actual cost of work performed is literally just how much we paid for the work that's been done so far so activity a incurred $600 so its actual cost of work performed is $600 activity B cost $1400 so it's actual cost is 1,400 notice we intended on we we planned for B to cost 1,200 it actually cost 1,400 so it's actual cost of work performed 1400 activity C so far has incurred $500 for the work performed so we put in $500 here and activity D has encouraged $200 for the work that's being performed so we have 200 and then activity e hasn't started yet we haven't spent any money on it so we get a zero for that so the total to date if you just add up these numbers will get $2,700 $2,700 to the actually completed so that means we we've completed a hundred percent of activity a and we planned activity a to cost $600 so the budgeted cost of work performed for activity a is $600 right that's exactly we expected we budgeted to pay $600 to complete activity a by a hundred percent so activity B is also a hundred percent complete by the time of this field report an activity B we budgeted twelve hundred dollars for that that's what we expected so we'll put in 1200 right that's the budgeted cost of the work that was performed and we performed the entire activity and we expected it to cost $1200 for the total cost of that activity activity C we've completed 33% of it and we expected the total cost of the whole activity C to be twelve hundred dollars or four hundred dollars a day is what we budgeted for so the budgeted cost of the actual work that was performed because we only actually performed one full day's worth of work well we've budgeted four hundred dollars for one day so the budgeted cost of work performed four hundred then for activity see we've completed 50% of the activity by the end of the seventh day which means 50% of this two-day activity means we've actually accomplished one full day of work we budgeted at the beginning for $200 per day for activity D so that means that the budgeted cost of the actual work performed we only completed one day it would be $200 again activity e we had we haven't budgeted anything for activity e yet because it wasn't it wasn't scheduled at the start so that will be another zero so if you just add these up the total to date for BC WP would be 2400 now for BC WS this is the budgeted cost of work scheduled this is how much we expected to pay for each activity that we had expected to finish by the reporting date right we had scheduled activity a to be completely done activity B to be completely done tivity D to be completely done and we had a scheduled activity C to be two-thirds done so what is the budgeted cost for those targets well for activity a that's simple we had expected it the total cost to be $600 and we had expected 100% of it to be complete well before day seven so the BC WS $600 budgeted cost of work scheduled again activity B before the seventh the end of the seventh day we expected a hundred percent to be complete and costing us $1,200 so the BC WS is twelve hundred dollars now for activities C we budgeted or we scheduled now for activity C by the end of the seventh day we were expecting two-thirds of the project or of the activity to be done so two thirds of it would be two days and we expected activity C to cost us four hundred dollars a day so that would be we would be expecting to have spent $800 on activity C at the end of the seventh day based on our original plan so that would be budgeted cost of work scheduled for activity C would be $800 activity D well we expected activity D to be completely done by the end of the seventh day based on our original plan activity D was $200 a day for two days or just $400 total cost if it's completely done so that's what we expected the budgeted cost of the work scheduled because we had scheduled activity D to be completely done by this date was $400 now if you look at this activity e well we hadn't scheduled anything to be spent on activity yet and again this will be zero so if we just add up all these together we will get a total budgeted cost of work scheduled of three thousand dollars so we were expecting by day seven if this plan had gone according to plan that we would have spent three thousand dollars at the end of day seven okay so if you remember from the previous videos CPI is the cost performance index and CV is this cost variance SBI is the schedule Performance Index and SV is the schedule variance and their formulas are down here for you so we can go ahead and we can fill out the the total project to date for the CPI cv SPI and SV it's not as meaningful to do it on an individual activity you can because these are all those ratios and simple expressions but the more important thing is we want to find out if the entire project is ahead of schedule behind schedule etc or above budget or below budget so for CPI all we do is we take BC WB divided by AC WP so we have 2,400 divided by 2,700 that's going to give us zero point eight eight nine eight eight nine now if you recall if we have a CPI that's less than 1 that means the project is over budget so we can also do cost variance that's BC WP minus AC WPS we have BC WPS we have 2400 minus 2700 that gives us a value of negative 300 and also for cost variance this is another way to tell if the project is above or below budget for the cost variance a negative value means that the project is over budget so we can tell right away we're spending more money than we have expected to spend which you can see right here because we've the actual cost of the work performed is $2,700 but the budgeted cost of the work performed is 2400 so we were expecting to only pay $2,400 for the work that had been done but we paid 27 hundred but notice that neither of these things like anything about whether or not the project is ahead or behind of schedule that's what the SBI and SV r4 so for the schedule Performance Index we have B C WP / b CW s so we have 2400 / 3000 that's going to give us 0.8 and if we had an SBI that is less than 1 then that means the project is behind schedule similarly we can do the schedule variance we have b CW p - b CW s so we had 2,400 and - 3000 that gives us a value of negative 600 and the actual number isn't as meaningful it's just if the number is negative if we have an SV of less than 0 or negative value then that's an indication that our project is behind schedule and again you can kind of see that by looking at the Gantt chart that we were expecting to have also date the the second third or day 2 of activity C done and we're expecting to have all of activity D done but those haven't been completed yet so we're actually you can see by this that you know visually we were behind schedule but this is a more official way of actually seeing if we are behind schedule ahead of schedule or also if we are over budget or under budget so in this case our project is over budget and behind schedule
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Channel: Engineer4Free
Views: 276,483
Rating: 4.8968887 out of 5
Keywords: free, engineer, engineering, math, university, science, tutor, tutorial, lesson, online, learning, mathematics, engineer4free, worked, example, project, management, Project Management (Industry), earned, value, analysis, earned value, Earned Value Management, Gantt, chart, ACWP, BCWP, BCWS, actual, cost, budgeted, work, performed, scheduled, CPI, SPI, SV, CV, variance, progress, report, PMI, PMP, PM, certification, agile, construction, sotware, activity, table, complete, percent, % complete
Id: z7b3SYQuqJM
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Length: 10min 31sec (631 seconds)
Published: Fri Feb 20 2015
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