Cost Data

1. Cost Data

2. Cost Data Overview • Factors • Earned Value • 50/50 Rule • Examples

3. Factors • BCWS - Budgeted Cost Work Scheduled - Budget entry numbers • ACWP - Actual Cost Work Performed - Actuals, what you spent • BCWP - Budgeted Cost Work Performed - Earned Value, what you have accomplished

4. Factors • BAC - Budget at Completion - the total of all the budget numbers, the bottom line • EAC - Estimate at Completion - based on your rate of expenditures, what you probably will spend by the end of the project • CV - Cost Variance, BCWP - ACWP = CV • SV - Schedule Variance, BCWP - BCWS = SV

5. Factors • CPI - Cost Performance Index BCWP/ACWP = CPI • SPI - Schedule Performance Index BCWP/BCWS = SPI

6. BCWP - Earned Value • Calculating Earned Value should be easy if you set up your budget correctly. • Earned Value or BCWP is the value of what you have produced. If you have produced $500,000 worth of the $1,000,000 project, your BCWP is $500,000 or 50%.

7. BCWP - Earned Value • Let’s use a wall as an example: • There are $50 per foot in materials • It will take 4 labor hours per foot to build at $20/hour • There will be $200 in other labor charges • There is a crew of four working • The wall is 80 feet long • On the first and last days the crew has 8 hours of set up and tear down time each

8. BCWP - Earned Value • Budget • Materials - $50 X 80 = $4000 • Labor for wall - 4 X 80 X $20 = $6400 • Labor for set up and tear down - 16 X $20 = $320 • Additional Labor - $200 • Total = $10,920

9. Budget for Wall

10. Budget for Wall

11. Budget for Wall

12. Wall • Question • How would you do this budget different?

13. Actual Construction

14. Actuals For Wall • Day 1 • Set up – 6 hours • 10 feet done • Materials - 10 X $50 = $500 • Labor = $18.18 +(32 X $20) = $668.18 • Total = $1168.18 • BCWS = $958.18 • ACWP = $1168.18 BCWP = ?

15. BCWP • How would you allocate the budget so you could determine BCWP?

16. BCWP • Easiest is to take total costs and prorate over some easy thing to measure, like the length of the wall. • $10,920/80 = $136.50 / foot completed

17. Actuals For Wall • Day 1 • Set up – 6 hours • 10 feet done or a value of (10 X $136.50) = $1365.00 or $1365.00/10,920 complete = 12.5% complete • Materials - 10 X $50 = $500 • Labor = $18.18 +(32 X $20) = $668.18 • Total = $1168.18 • BCWS = $958.18 • ACWP = $1168.18 • BCWP = $1365.00

18. Actuals for Wall - Day 1 • BCWS = $958.18 • ACWP = $1168.18 • BCWP = $1365.00 • CV = BCWP - ACWP = 1365.00 - 1168.18 = $196.82 Positive so it is favorable • SV = BCWP - BCWS = 1365.00 - 958.18 = $406.82 Positive so it is favorable • CPI = BCWP/ACWP = 1365/1168.18 = 1.168 or for every dollar that is spent, we earn $1.17 in value • SPI = BCWP/BCWS = 1365/958.18 = 1.42 or we are doing about 40% better on schedule than anticipated. • EAC = BAC/CPI = $10,920/1.17 = $9333.33

19. Actuals For Wall • Day 2 • It rained - no work performed • Labor = $18.18 +(32 X $20) = $668.18 • Total = $668.18 • BCWS = $2016.36 • ACWP = $1836.36 • BCWP = $1365.00

20. Actuals for Wall - Day 2 • BCWS = $2016.36 • ACWP = $1836.36 • BCWP = $1365.00 • CV = BCWP - ACWP = 1365.00 - 1836.36 = - $471.36 Negative so it is unfavorable • SV = BCWP - BCWS = 1365.00 - 2016.36 = - $651.35 Negative so it is unfavorable • CPI = BCWP/ACWP = 1365/1836.36 = 0.74 or for every dollar that is spent, we earn $0.74 in value • SPI = BCWP/BCWS= 1365/2016.36 = 0.67 or we are doing much worse than we budgeted • EAC = BAC/CPI = $10,920/0.74 = $14756.76

21. Actuals For Wall • Day 3 • Sunny day, crew motivated, did 14 feet today. • Materials = 14 X $50 = $700 • Total Done = 24 • BCWP = 24 X 136.50 = $3276.00 • Labor = $18.18 +(32 X $20) = $668.18 • Total = $1368.18 • BCWS = $3074.54 • ACWP = $ 3204.54 • BCWP = $3276.00

22. Actuals for Wall - Day 3 • BCWS = $3074.54 • ACWP = $ 3204.54 • BCWP = $3276.00 • CV = BCWP - ACWP = 3276.00 - 3204.54 = $71.46 Positive so it is favorable • SV = BCWP - BCWS = 3276.00 - 3074.54 = $201.46 Positive so it is favorable • CPI = BCWP/ACWP = 3276/3204.54 = 1.02 or for every dollar that is spent, we earn $1.02 in value • SPI = BCWP/BCWS= 3276/3074.54 = 1.06 or we are doing much worse than we budgeted • EAC = BAC/CPI = $10,920/1.02 = $10,705.89

23. S - Curves • Ok, so now we can calculate the statistics • Next we want to be able to graph the numbers and see where we are from a visual perspective.

24. S Curves • S Curves are a good way to see at a glance what is going on. • The following curve shows our data on a graph.

25. S Curves BCWS ACWP BCWP

26. S Curves BCWS BCWP ACWP

27. S Curves BCWS BCWP ACWP

28. S Curves BCWS ACWP BCWP

29. S Curves BCWS ACWP BCWP

30. S Curves BCWS ACWP BCWP

31. S Curves BCWS ACWP BCWP

32. S Curves BCWS ACWP BCWP

33. Wall Example Continued • The following Excel example shows how the curves can be used.

34. 50/50 Rule • Frame has an easier way to calculate earned value. • It is called the 50/50 rule. • With this rule, you earned 50% of the earned value the instant you start a task and the other 50% when the task is complete.

35. 50/50 Rule Task 1 = $50k Task 2 = $25k Task 3 = $40k

36. 50/50 Rule Task 1 = $50k: Started so, we have earned $25k Task 2 = $25k Task 3 = $40k BCWP = ?

37. 50/50 Rule Task 1 = $50k: Started so, we have earned $25k Task 2 = $25k Task 3 = $40k BCWP = 25K

38. 50/50 Rule Task 1 = $50k: Started so, we have earned $25k Task 2 = $25k: Started so have earned $12.5k Task 3 = $40k BCWP = ?

39. 50/50 Rule Task 1 = $50k: Started so, we have earned $25k Task 2 = $25k: Started so have earned $12.5k Task 3 = $40k BCWP = $37.5K

40. 50/50 Rule Task 1 = $50k: Finished so, we have earned $50k Task 2 = $25k: Started so have earned $12.5k Task 3 = $40k: Started so we have earned $20k BCWP = $82.5K

41. Reminders • BCWP can never exceed BCWS • At the end of a project the schedule variance will always equal zero • Cost variance can exceed BCWS