To record some, the basic concepts of cost management
Tools and Techniques for Cost Management
1. Earned Value Management
EVM is a method for evaluating project performance and progress by considering the scope, schedule, and performance together.
2. Planned Value (PV), which is the approved budget allocated for planned work
3. Earned Value (EV), which is a measure of work done, expressed in terms of the budget allocated to the work EV=PV*SPI
4. Actual Cost (AC), which is the actual cost of performing work during a given period of time
5. Progress deviation (SV) SV= EV-PV progress deviation SV>0 means the progress is advanced, good
6. Cost variance (CV) CV=EV-AC Cost variance CV>0 represents cost savings, good
7. Progress Performance Index (SPI) SPI=EV/PV SPI<1, the progress is behind
8. Cost Performance Index (CPI) CPI=EV/AC CPI<1, cost overrun
9. Budget at Completion (BAC), the total cost of the project, which has been constant and is expected to be used to complete the project.
10.EAC [Estimate at completion] Estimate at completion: What is the cost of all the work? It is a prediction of the most likely total cost of the project based on the project's performance and risk quantification.
11.etc
AC=∑The actual expenses incurred
EV = ∑ Earned Value
PV=∑ each planned value
BAC=∑ all PVs at completion
Typical deviation
It is a typical factor, how was the performance of the previous project, and the performance of the future project is still the same
EAC= AC+(BAC-EV) =BAC/CPI
ETC=EAC-AC
Atypical deviations:
It is the atypical factor, that is, the performance before the project, which does not affect the performance after the project.
ETC=BAC-EV Baseline Total Cost - Earned
EAC=ETC+AC
Cost overruns, behind schedule Take action: Improve project team performance. Train team members to improve resource efficiency and replace inefficient resources