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