Project Evaluation and Control
When was Earned Value Analysis (EVA) developed?
One of the most effective project evaluation and monitoring methods is Earned Value Analysis (EVA) which was developed in the 1960’s.
How does EVA work?
EVA compares the planned and actual (realized) cost and workload
values for a specified date (status date) determined by project manager. Then, it gives a numerical value if there is a deviation between the plan
and the actual situation. Eventually, the project manager obtains valuable information about the progress of the project.
What are the three metrics used to define the size of a project?
Three important metrics can be used to define the size of a project: project completion time (PCT), budget, and workload.
What does "Project completion time" mean?
Project completion time is the difference between the latest finish date
of the last activity and the earliest start date of the first activity of a project.
What does budget mean?
Budget means the total cost to be spent for the whole project.
What does workload mean?
Workload means the total amount of man-hours to be used in the project according to the baseline plan?
What do actual workload and actual cost mean?
Actual cost means total money spent by the status date (evaluation date), and actual workload means total man-hours realized by the status date.
What four steps must be followed to evaluate and control a project?
In order to evaluate and control a project ,you should follow these four steps (Larson, & Clifford, 2011):
1. Setting a baseline plan
2. Measuring progress and performance
3. Comparing plan with the actual
4. Taking action
In which step of the project evaluation process does EVA take place?
Earned Value Analysis takes part in the 3rd step of the project evaluation process.
Which unit of the US government developed EVA?
EVA was developed in 1967 by the US Department of Defence.
Which questions can be explained by using the EVA technique?
By using this (EVA) technique, we can answer the following questions:
• Is the improvement of a project coherent with its baseline plan? (In terms of budget and workload)
• Are there differences between planned and actual cost and workload?
• If so, how far is the project from the plan?
What are the two basic indicators to evaluate a project in terms of cost and workload?
There are two basic indicators to evaluate a project in terms of cost and workload. The first one is the cost performance index (CPI) and the other one is the schedule performance index (SPI).
If CPI is equal to one at the status date, what does that indicate?
If CPI is equal to one at the status date, it means that actual spending has been realized in accordance with the baseline plan.
If CPI is less than one, what does that indicate?
If CPI is less than one, that means there is much spending according to the baseline plan.
If SPI is equal to one, what does that indicate?
if SPI is equal to one, actual workload has been realized in accordance
with the baseline plan by the status date.
If SPI is less than one, what does that indicate?
If SPI is less than one, it means that less work has been done according to the baseline plan (schedule).
Which two values are the most important indicators that reveal the performance of a project?
Cost performance index (CPI) and the schedule performance index (SPI) are the most important indicators hat reveal the performance of a project.
What is Budget at Completion (BAC)?
BAC (Budget at Completion): BAC is budget of an activity or a project, and it is also called the baseline cost which means the cost of the baseline plan. It is calculated at the end of the planning phase.
Duration of activity A in a project is 2 weeks. In order to realize this activity, 2 workers, a machine, and 10 kg raw materials are needed. Costs are given as 10TL/hour for a worker, 500 TL/one usage, and 20 TL/kg for raw material, and additionally, 100 TLfor raw material transportation. Calculate budget and workload of activity A.
Since one week is equal to five workdays, and one workday is equal to eight hours in the standard calendar, the duration of activity A is 2*5*8=80 hours.
Let wA show the workload and BACA show the budget of activity A.
Working duration of machine is added to workload amount. Therefore, wA=80*2+80*1=240 man-hours.
This value means, two workers and one machine will work along 80 hours, and the total workload is 240 man-hours. BACA=160*10+500+20*10+100= 2400 TL.
If BCWS, BCWP, and ACWP values are the same, what does this indicate?
If BCWS, BCWP, and ACWP values are the same (or if there are small differences), that means the project is on the way, and there is only one cumulative S-type cost-time curve in the diagram.