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Project Cost Management: PR Oject M A Nagem Ent MBA2K13A Nustbusiness School

This document discusses project performance measurement and key metrics. It defines terms like budget at completion (BAC), planned value (PV), actual cost (AC), and earned value (EV). An example project is provided where the team has spent Rs 600,000 after 5 months to complete 4 rooms of a 10 room, 10 month project with a Rs 1,000,000 budget. Based on this, the PV is Rs 500,000, the AC is Rs 600,000 and the EV is Rs 400,000. Variances and performance indexes like SPI and CPI are defined to measure schedule and cost performance. The estimated cost at completion is calculated based on actual costs plus remaining required funds.

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Salman Ejaz
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57 views11 pages

Project Cost Management: PR Oject M A Nagem Ent MBA2K13A Nustbusiness School

This document discusses project performance measurement and key metrics. It defines terms like budget at completion (BAC), planned value (PV), actual cost (AC), and earned value (EV). An example project is provided where the team has spent Rs 600,000 after 5 months to complete 4 rooms of a 10 room, 10 month project with a Rs 1,000,000 budget. Based on this, the PV is Rs 500,000, the AC is Rs 600,000 and the EV is Rs 400,000. Variances and performance indexes like SPI and CPI are defined to measure schedule and cost performance. The estimated cost at completion is calculated based on actual costs plus remaining required funds.

Uploaded by

Salman Ejaz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Project Cost

Management
P R O J E C T M A N AG E M E N T
MBA 2K13 A
NUST BUSINESS SCHOOL

How do you measure Project


Performance?

Which Factor do you use for


Performance measurement?
Time

Cost

Progres
s

What are the metrics used?

Terminologies
BAC
PV

Stands for
Budget At
Completion
Planned
Value

AC

Actual Cost

EV

Earned Value

Old Terminology
Budgeted Cost of
Work Schedule
(BCWS)
Actual Cost of Work
Performed (ACWP)
Budgeted Cost of
Work Performed
(BCWP)

An EXAMPLE
Project = 10 rooms
Duration = 10 months
Budget = Rs 1,000,000
Assumptions
1. Each room will be completed one by one.
2. Each room will cost Rs 100,000.
3. Each room will take 1 month to complete.

Suppose five months have passed. The team has spent Rs 600,000. if 4 rooms have been
completed
What is the PV?
500,000
What is AC?
600,000
What is the EV?
400,000
What is the health of this project?

PERFORMANCE MEASUREMENT
Variances
SV

= EV

(Schedule Variance)

CV

= EV

(Cost Variance)

PV

(Earned Value)

(Planned Value)

AC

(Earned Value)

(Actual Cost)

PERFORMANCE MEASUREMENT
Performance Index
Schedule performance Index

SPI = EV / PV

Cost Performance Index

CPI = EV / AC

FORECAST
Estimated At Completion =
Cash already spent

+
More cash required to complete remaining work

Estimated At Completion =
EAC = AC + (BAC EV)

Budget

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