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Flashcards in Project Cost Management Deck (16)
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1
Q

How is Schedule Performance Index (SPI) calculated and what does it mean?

A
Formula:  SPI = EV/PV
   EV = Earned Value
   PV = Planned Value
Meaning:
Measures project progress against the rate originally planned
    1    Project is on schedule
  1    Project is ahead of schedule
2
Q

How is Cost Performance Index (CPI) calculated and what does it mean?

A
Formula:  CPI = EV/AC
   EV = Earned Value
   AC = Actual Cost
Meaning:
$ worth of work for every $ spent
    1    On budget
  1    Ahead of budget
3
Q

How is Schedule Variance (SV) calculated and what does it mean?

A

Formula: SV = EV - PV
EV = Earned Value
PV = Planned Value

Negative = Behind schedule
Zero = On schedule
Positive = Ahead of schedule

4
Q

How is Planned Value (PV) determined?

A

Authorized budget of the work to be accomplished for an activity.
Total planned value for the project is also known as Budget at Completion (BAC)

5
Q

How is Earned Value (EV) determined?

A

Value of the work that has been actually completed.

6
Q

How is Actual Cost (AC) determined?

A

Actual cost incurred for the work completed.

7
Q

What is Budget at Completion (BAC)?

A

Total budget for the project

8
Q

How is Cost Variance (CV) calculated and what does it mean?

A
Formula:  EV - AC
EV = Earned Value
AC = Actual Cost
If negative, project is over budget
If positive, project is under budget
9
Q

How is Variance at Completion (VAC) calculated and what does it mean?

A

Formula: BAC - EAC
BAC = Budget at Completion
EAC = Estimate at Completion
As of today, how much over or under budget is the project expected to be

10
Q

How is Estimate to Complete (ETC) determined and what does it mean?

A

How much more will the project cost
Formula: EAC - AC
OR
Re-estimate remaining work from the bottom up

11
Q

What is Estimate at Completion (EAC) used for?

A

To determine how much the total project is expected to cost, as of today

12
Q

What are the four formulas for EAC and when are they used?

A
  1. BAC/CPI
    Use if no variances from BAC have occurred or project will continue at the same rate of spending (based on cumulative CPI or trends in current CPI)
  2. AC + Bottom-up ETC
    Use when original estimate was inaccurate and project needs to be re-baselined
  3. AC + (BAC - EV)
    Use when one-time variances have occurred that will not occur again or are thought to be atypical for the future
  4. AC + (BAC - EV)/(CPI x SPI)
    Use when current variances are thought to be typical for the future and when schedule constraints will influence the remaining work, for example when cumulative CPI is less than one and a firm completion date must be met.
13
Q

What is To-Complete Performance Index (TCPI)?

A

Answers the question, in order to stay within budget, what rate must be met for the remaining work
Formula: (BAC - EV) / (BAC - AC)

14
Q

What is a Rough Order of Magnitude (ROM) estimate?

A

Used during project initiation, typical range is -25% to + 75% but can vary depending on how much is known about the project

15
Q

What is a Budget estimate?

A

Used during project planning, typical range is -10% to + 25%

16
Q

What is a Definitive estimate?

A

Refined estimate as the project progresses, typical range is +/-10% or -5% to +10%