Months After Goahead

FIGURE 15-16. Project Z, task 3 cost data (contractual).

• Milestone: This is used for long work packages with associated interim milestones, or a functional group of activities with a milestone established at identified control points. Value is earned when the milestone is completed. In these cases, a budget is assigned to the milestone rather than the work packages.

• Percent complete: Usually invoked for long-duration work packages (i.e., three months or more) where milestones cannot be identified. The value earned would be the reported percent of the budget.

• Equivalent units: Used for multiple similar-unit work packages, where earnings are on completed units, rather than labor.

• Cost formula (80/20): A variation of percent complete for long-duration work packages.

• Level of effort: This method is based on the passage of time, often used for supervision and management work packages. The value earned is based on time expended over total scheduled time. It is measured in terms of resources consumed over a given period of time and does not result in a final product.

• Apportioned effort: A rarely used technique, for special related work packages. As an example, a production work package might have an apportioned inspection work package of 20 percent. There are only a few applications of this technique. Many people will try to use this for supervision, which is not a valid application. This technique is used for effort that is not readily divisible into short-span work packages but that is in proportion to some other measured effort.

Generally speaking, the concept of earned value may not be an effective control tool if used in the lower levels of the WBS. Task levels and above are normally worth the effort for the calculation of earned value. As an example, consider Figure 15-16, which shows the contractual cost data for task 3 of project Z, and Table 15-3, which shows the cost data status at the end of the fourth month. The following is a brief summary of the cost data for each subtask in task 3 at the end of the fourth month:

• Subtask 1: All contractual funds were budgeted. Cost/performance was on time as indicated by the milestone position. Subtask is complete.

TABLE 15-3. PROJECT Z, TASK 3 COST DATA STATUS AT END OF FOURTH MONTH (COST IN THOUSANDS)

Subtasks Status BCWS BCWP ACWP

TABLE 15-3. PROJECT Z, TASK 3 COST DATA STATUS AT END OF FOURTH MONTH (COST IN THOUSANDS)

Subtasks Status BCWS BCWP ACWP

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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