You have been serving as Electroscan’s project manager and are now well along in the project. Develop a narrative status report for the board of directors of the chain store that discusses the status of the project to date and at completion. Be as specific as you can using numbers given and those you might develop. Remember, your audience is not familiar with the jargon used by project managers and computer software personnel; therefore, some explanation may be necessary. Your report will be evaluated on your detailed use of the data, your total perspective of the current status and future status of the project, and your recommended changes (if any).
The Application of Additional Earned Value Rules
The following example and exercises are designed to provide practice in applying the following three earned value rules:
- Percent complete rule
- 0/100 rule
- 50/50 rule
See the chapter for an explanation of each of these rules.
- 0/100 rule. This rule assumes credit is earned for having performed the work once it is completed. Hence, 100 percent of the budget is earned when the work package is completed. This rule is used for work packages having very short durations.
- 50/50 rule. This approach allows 50 percent of the value of the work package budget to be earned when it is started and 50 percent to be earned when the package is completed. This rule is popular for work packages of short duration and small total costs.
- Percent complete with weighted monitoring gates. This more recent rule uses subjective estimated percent complete in combination with hard, tangible monitoring points. This method works well on long-duration activities that can be broken into short, discrete work packages of no more than one or two report periods. These discrete packages limit the subjective estimated values. For example, assume a long-duration activity with a total budget of $500. The activity is cut into three sequentially discrete packages with monitoring gates representing 30, 50, and 100 percent of the total budget. The earned amount at each monitoring gate cannot exceed $150, $250, and $500. These hard monitoring points serve as a check on overly optimistic estimates.
The same simplifying assumptions used for the chapter example and exercises will also be used here.
- Assume each cost account has only one work package, and each cost account will be represented as an activity on the network.
- The project network early start times will serve as the basis for assigning the baseline values.
- Except when the 0/100 rule or 50/50 rule is used, baseline values will be assigned linearly, unless stated differently. (Note: In practice estimated costs should be applied “exactly” as they are expected to occur so measures of schedule and cost performance are useful and reliable.)
- Page 501For purposes of demonstrating the examples, from the moment work on an activity begins, some actual costs will be incurred each period until the activity is completed.
- When the 0/100 rule is used, the total cost for the activity is placed in the baseline on the early finish date.
- When the 50/50 rule is used, 50 percent of the total cost is placed in the baseline on the early start date and 50 percent on the early finish date