The effect of level of effort evt
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The effect of Level of Effort EVT. introduction. LoE – This PMT is best used when it is impossible to determine progress for a task.

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The effect of Level of Effort EVT

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The effect of level of effort evt

The effect of Level of Effort EVT


Introduction

introduction

  • LoE – This PMT is best used when it is impossible to determine progress for a task.

  • This only works in circumstances where the forecast dates are the same as the Baseline dates, and if you will never need to do work from a previous month which was not done


Earned value techniques

Earned Value Techniques

  • The CAM must allocate an appropriate Earned Value technique to the work being performed

SOME EXAMPLE METHODSDESCRIPTION

50 / 50

0/100

Physical % complete

Incremental Milestone

Equivalent Units

Level of Effort

50% is earned as soon as work starts & remaining 50% when work is complete

Nothing is earned until the work is complete.

A percentage method of assessment

Weighted budget values assigned to milestones within a work package

Places a given value on each unit completed

EV is equal to BCWS at all times


50 50 xx yy

50/50 – xx/yy

When the work package begins in one period and completes in the next. No way of gaining credit between start and completion. Start and completion valued at 50% (or XX/YY). Completion should have criteria defined. Ideal when the plan consists of several short operations/activities.

P1

P2

P3

P4

P5

50

50

Total Budget 100

30

70


0 100

0-100

No credit can be gained before completion.

Strictly limited to work packages starting and completing in the same reporting period.

P1

P2

P3

P4

P5

0

100


Incremental milestones

Incremental Milestones

When work packages exceed 2 reporting periods. 1 milestone a month is ideal. Each milestone should have its own value defined discrete from others. This means that the milestones are not sequential.

P1

P2

P3

P4

P5

Budget 10

Budget 25

Budget 45

Budget 20

Total Budget 100


Units complete

Units Complete

For physical counts of product or outputs. Each element is given a value for completion and then the units calculated. This is ideal for measuring items like drawings.

P1

P2

P3

P4

P5

£10/unit

10

15

15

5

Budget Units 45

£100

£150

£150

£50

Total £450


Percent complete

Percent Complete

For long work packages > 3 periods – no quantities to count and no definable milestones. Forecast % complete at end of each period and apply to BAC.

Success criteria should be identified to justify the Percentage claimed. For example 25% can be claimed only when the first draft of a document has been completed.

10%

40%

80%

100%

Total Budget 1000

100

400

800

1000


Apportioned effort

Apportioned Effort

When activities are performed in support of other direct activities eg Assembly work and the associated material. The effort is estimated and planned as a % of the production effort. There must be a method of determining this %.

50%

Assembly work

£10,000

Material Draw down

£500,000

50%


Level of effort

Level of Effort

  • Level of Effort

    When tasks are are difficult to quantify with respect to accomplishment. Supportive activities – no definable outputs – budget scheduled over the period of performance. EV based on passage of time – EV always equal to planned accomplishment. – There can be no schedule variance. Beware, where effort is not linear, may end up with cost variance if more hours booked than planned.

  • LoE – This PMT is best used when it is difficult to track the progress of an activity.

  • This only works in circumstances where the forecast dates are the same as the Baseline dates.

  • Remember – Earned Value should be credited in the same way it is planned.


Correctly profiled

Correctly profiled

Time now

BAC = 800

ACC BCWS = 400

ACC BCWP = 400

ACC ACWP = 400

Acc BCWS = 400

Acc BCWP = 400

Acc ACWP = 400

Acc SV = 0

Acc CV = 0


Incorrectly profiled

Incorrectly profiled

  • There may be circumstances where it may seem appropriate to re-forecast a LOE package before it starts.

  • For example an activity was baselined to start month 1 and then forecasted to start now in month 5. The following slides explain the effect of this on the EV data.


Incorrectly profiled month 1

Incorrectly profiled Month 1

Time now

ACC BCWS = 100

ACC BCWP = 0

Re-forecast start date

Acc BCWS = 100

Acc BCWP = 0

Acc ACWP = 0

Acc SV = -100

Acc CV = 0

BAC = 800

EAC = 800

ACC ACWP = 0


Incorrectly profiled month 2

Incorrectly profiled Month 2

Time now

ACC BCWS = 200

ACC BCWP = 0

Acc BCWS = 200

Acc BCWP = 0

Acc ACWP = 0

Acc SV = -200

Acc CV = 0

BAC = 800

EAC = 800

ACC ACWP = 0


Incorrectly profiled month 3

Incorrectly profiled Month 3

Time now

ACC BCWS = 300

ACC BCWP = 0

Acc BCWS = 300

Acc BCWP = 0

Acc ACWP = 0

Acc SV = -300

Acc CV = 0

BAC = 800

EAC = 800

ACC ACWP = 0


Incorrectly profiled month 4

Incorrectly profiled Month 4

Time now

ACC BCWS = 400

ACC BCWP = 0

Acc BCWS = 400

Acc BCWP = 0

Acc ACWP = 0

Acc SV = -400

Acc CV = 0

BAC = 800

EAC = 800

ACC ACWP = 0


Incorrectly profiled month 5

Incorrectly profiled Month 5

Time now

ACC BCWS = 500

ACC BCWP = 500

Acc BCWS = 500

Acc BCWP = 500

Acc ACWP = 120

Acc SV = 0

Acc CV = 380

BAC = 800

EAC = 800

ACC ACWP = 120


The effect of level of effort evt

WHY!

  • This is a strange effect of Earned Value and the PMT of LOE. Although the actual performance has not been worth 500, LOE means that the total performance will equal the value of the Baseline (BCWS) at time now.


Incorrectly profiled month 6

Incorrectly profiled Month 6

Time now

ACC BCWS = 600

ACC BCWP = 600

Acc BCWS = 600

Acc BCWP = 600

Acc ACWP = 240

Acc SV = 0

Acc CV = 360

BAC = 800

EAC = 800

ACC ACWP = 240


Incorrectly profiled month 7

Incorrectly profiled Month 7

Time now

ACC BCWS = 700

ACC BCWP = 700

Acc BCWS = 700

Acc BCWP = 700

Acc ACWP = 360

Acc SV = 0

Acc CV = 340

BAC = 800

EAC = 800

ACC ACWP = 360


What does these mean

What does these mean

  • Looking at the data as it stands now it tells us:

    • We have only one month of work left to do

    • We are on target to complete with no schedule variance

    • We have been very efficient we have done £700 for only £360 (positive CV of £340)

    • We should under spend on completion and therefore the EAC is to high

  • How real are these conclusions:

    • Because we know the work was started late, we know more than 1 months work is needed.

    • We also know the work is behind schedule, but not from the EV data

    • As the CAM we would know that only £100 of performance is being achieved for a cost of £120 per month so we are not efficient

    • This efficiency in fact means that the EAC is too low.


Incorrectly profiled month 8

Incorrectly profiled Month 8

Time now

ACC BCWS = 800

ACC BCWP = 800

Acc BCWS = 800

Acc BCWP = 800

Acc ACWP = 4800

Acc SV = 0

Acc CV = 320

BAC = 800

EAC = 800

ACC ACWP = 480


Graph data cum performance

Graph data Cum Performance


Graph data cum performance1

Graph data Cum Performance


Graph data cum performance2

Graph data Cum Performance


Graph data cum performance3

Graph data Cum Performance


Graph data cum performance4

Graph data Cum Performance


Graph data cum performance5

Graph data Cum Performance


Graph data cum performance6

Graph data Cum Performance


Graph data cum performance7

Graph data Cum Performance


Graph data cum performance8

Graph data Cum Performance


Graph data cum performance9

Graph data Cum Performance


Graph data cum performance10

Graph data Cum Performance


Graph data cum performance11

Graph data Cum Performance


Questions

Questions

  • At what month could you determine that an over spend was going to happen, and by how much did you expect it to be.


Cumulative variances

Cumulative variances


Cumulative variances1

Cumulative variances


Cumulative variances2

Cumulative variances


Cumulative variances3

Cumulative variances


Cumulative variances4

Cumulative variances


Cumulative variances5

Cumulative variances


Cumulative variances6

Cumulative variances


Cumulative variances7

Cumulative variances


Cumulative variances8

Cumulative variances


Cumulative variances9

Cumulative variances


Cumulative variances10

Cumulative variances


Cumulative variances11

Cumulative variances


Other effects

Other Effects

  • Where you are in a situation where more performance is being claimed than the spend incurred a positive Cost Performance Index (CPI) is created, meaning you are efficient than expected. Where the performance is due to the incorrect LOE re-forecast, an artificial variance has been created. Some Independent Estimates at completion (IEAC) formulas use the CPI, and if this is artificial then the IEAC will not be correct.


Ieac based on cur cum cpi

IEAC based on Cur/Cum CPI


Ieac based on cur cum cpi1

IEAC based on Cur/Cum CPI


Ieac based on cur cum cpi2

IEAC based on Cur/Cum CPI


Ieac based on cur cum cpi3

IEAC based on Cur/Cum CPI


Ieac based on cur cum cpi4

IEAC based on Cur/Cum CPI

BCWP

CPI= ACWP

BCWP = 500

ACWP = 120

CPI = 4.2


Ieac based on cur cum cpi5

IEAC based on Cur/Cum CPI


Ieac based on cur cum cpi6

IEAC based on Cur/Cum CPI


Ieac based on cur cum cpi7

IEAC based on Cur/Cum CPI


Ieac based on cur cum cpi8

IEAC based on Cur/Cum CPI


Ieac based on cur cum cpi9

IEAC based on Cur/Cum CPI


Ieac based on cur cum cpi10

IEAC based on Cur/Cum CPI


Ieac based on cur cum cpi11

IEAC based on Cur/Cum CPI


Questions1

Questions?

  • Presented by:

    • Russell Berkeley

    • Tel: 07515 685458


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