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Updating The Schedule: Setting Actual And Remaining Cost Values Of Activities InProgress

Updating The Schedule: Setting Actual And Remaining Cost Values Of Activities In Progress

One of the primary tasks during project control is periodically updating the baseline schedule to reflect the actual progress ofthe work done and to present a realistic forecast of the remaining work. Measuring the progress of a project can be done invarious ways. The two most well-known and widely used techniques are:

Earned Value Management (EVM): In this technique, the schedule predictions using the performance metrics available in EVMcompletely rely on estimates about the percentage completion of the activities and give a helicopter view on the performanceof the project at the current status day. This technique is outside the scope of this article.

Critical Path Method (CPM): A more time-consuming and detailed alternative is to update the baseline Gantt chart at theactivity level, which is often constructed using CPM techniques (or its extensions). In this so-called tracking Gantt chart, theschedule prediction is made by taking the actual and estimated remaining durations of each activity into account and byupdating the Gantt chart. In doing so, the tracking Gantt chart gives a prediction o the future schedule based on the inputs of

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actual and remaining durations/costs of activities.

In this article, periodic updates of a project in progress using the tracking CPM Gantt chart are discussed. More precisely, thenecessary inputs to periodically update the baseline schedule are described and illustrated by means of a simple two-activityproject. In this article, the following three topics are discussed:

Baseline schedule: Construct the baseline schedule to get the planned duration and budget at completion.

Schedule update: Set the actual start, actual and remaining duration and actual and remaining cost values to update theschedule.

Two remarks: Explain the difference between EVM and CPM schedule control and see whether the inclusion of resource costswill change the general approach discussed in this article.

Baseline schedule

In figure 1, a two activity project baseline schedule is shown with a total duration of 35 days. The precedence relation betweenthe two activities is assumed to be a finish-start relation with a minimal time-lag equal to zero. The earliest start (ES) andearliest finish (EF) times of each activity are indicated. It is assumed that the activity does not need renewable or consumableresources and that the activity durations and costs are set to the following values:

Activity 1:Planned duration = 15 daysFixed cost = € 1,000Variable cost = € 50 per day

Activity 2:Planned duration = 20 daysFixed cost = € 2,000Variable cost = € 50 per day

Figure 1: An exampleearliest start baselineschedule

Given the baselineinformation in figure 1, thetotal cost of the activitiesand the total project costcan be calculated as

follows:

Activity 1: 1,000 + 15 * 50 = € 1,750Activity 2: 2,000 + 20 * 50 = € 3,000

and hence the total budget at completion (BAC) is equal to € 4,750.

Project in progress

A project in progress needs a periodic update of the baseline schedule to be able to see the impact of previous changes onthe total expected project duration and cost. Therefore, progress input data must be given at regular times to update theportion of work already done and to predict the future changes and the impact on the total project duration and cost.

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Figure 2: Project inprogress at status day = 8(overridden logic)

Figure 2 displays theproject tracking Gantt chartat status day 8. Eventhough activity 1 has notfinished yet, activity 2 hasalready started despite theprecedence relation

between the two activities. This is known as an overridden schedule.

Actual start

Updating the schedule during project progress results in activities that have already started (finished or in progress) andactivities that still have to start. Therefore, a first crucial input metric to update the schedule is the actual start.

Actual Start: Actual starting time of an activity on or before the status date which might differ from the original baseline starttime.

The actual start times are set to 0 (activity 1, i.e. the project start) and day 6 for activity 2 to denote that both activities are inprogress at day 8.

Actual and remaining duration

Activities in progress need an update about their actual and remaining durations which might differ from their baseline durationvalues. Therefore, two crucial input metrics need to be given to update the schedule, as follows:

Actual Duration (AD): The time spent on an activity between its actual start time and the current status date. Hence, the actualduration can be smaller than, equal to or larger than the time span between the actual start and the current status date, and isused to represent the workload already spent on this activity until now (i.e. day 8).

Remaining Duration (RD): A forecast of how many time units (hours, days, weeks, years) an activity will need from the statusdate forward to finish its remaining work.

Activity 1 has been in progress for 8 days (actual duration), and the project manager estimates that it will take another 12days to finish this activity (remaining duration). Likewise, the actual duration for activity 2 is equal to 2 days while theremaining duration is estimated at 18 days.

Actual and remaining cost

Calculating the actual cost of the portion of work that is finished at the current time (day 8) and the remaining cost of the workthat still has to be done is based on the estimates for the actual and remaining durations.

Estimating the actual cost of the portion of work finished for the activity can be done using the following three metrics:

Actual Cost (AC): The actual cost for the work already done. Ideally, this actual cost should have a clear relation with theworkload already done by the various resources assigned to this activity. It can be done based on time sheets for the variousresources or based on knowledge about the actual spending’s already made for the portion of work done for the activity. Since

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updating the resource time sheets to get the actual cost of an activity in progress can be a time-consuming task, a simple andeffective alternative way to estimate the actual cost of an activity in progress can be done using the following formula:

Actual Cost

=

Planned Actual Cost + Planned Actual Cost Deviation

Planned Actual Cost (PAC): The planned actual cost is calculated based on the baseline schedule information and is equal tothe total planned activity cost given by the baseline schedule when the activity is in progress for AD time units. Consequently,the actual duration estimate to estimate the total workload spent on an activity in progress determines the planned actual costfor this activity. It is assumed that all costs are as planned and also the resources work as planned.

Planned Actual Cost Deviation (PACDev): Since uncertainty typifies projects or resources shift from time to time and workmore or less efficient than originally planned, the actual cost of an activity in progress can differ from the planned actual cost.Consequently, the planned actual cost deviation is a way to express that difference, and hence, positive or negative valuescan be set to denote that the actual cost of an activity in progress is higher or lower than the planned actual cost. ThisPACDev replaces the various time sheets of resources.

In the example of figure 2, the planned actual cost is equal to € 1,000 + 8 * 50 = € 1,400 for activity 1 and € 2,000 + 2 * 50 =€ 2,100 for activity 2. Consequently, the total actual cost of the portion of work done at day 8 is equal to € 3,500. In case thereal actual cost is lower or higher than this estimated planned cost, the PACDev should be set to negative or positive costvalues to update the actual cost.

Estimating the remaining cost of the remaining portion of work for the activity follows a similar approach, using the followingthree metrics:

Remaining Cost (RC): A forecast of how many additional monetary resources (euro, dollars, …) an activity requires to finishthe portion of remaining work. Similar to the actual cost estimate, the remaining cost estimate can be determined in thefollowing way:

Remaining Cost

=

Planned Remaining Cost + Planned Remaining Cost Deviation

Planned Remaining Cost (PRC): The planned remaining cost is, similar to the planned actual cost, calculated automaticallybased on the remaining duration (RD) input.

Planned Remaining Cost Deviation (PRCDev): In order to give a realistic estimate of the remaining cost, the plannedremaining cost value can be modified using the optional planned remaining cost deviation field.

In the example of figure 2, the planned remaining cost is equal to 12 * 50 = € 600 for activity 1 and 18 * 50 = € 900 for activity2. Consequently, the total remaining cost of the remaining portion of work to be done from day 8 is equal to € 1,500. In casethe remaining cost is expected to be lower or higher than this estimated planned cost, the PRCDev should be set to negativeor positive cost values to update the remaining cost.

It should be noted that the total expected cost at completion is now equal to € 3,500 + € 1,500 = € 5,000 (when both PACDevand PRCDev are equal to zero), which exceeds the BAC of € 4,750 and therefore a cost overrun is expected.

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Remarks

It should be noted that the EVM approach also has the objective of efficient project control, similar to the CPM scheduleupdate method discussed in this article, but is however based on a Percentage Completed (PC) estimate. The PC estimatereflects the portion of the total workload that is estimated to be finished. The Earned Value metric EV is based on this estimateas EV = PC * BAC. Note that neither the actual/remaining duration nor the actual/remaining cost need to have a link with thePC estimate and will not be explicitly used for the calculation of the EV metric.

It is also worth noting that in the example of figure 2, no costs for renewable and consumable resources have been taken intoaccount. If resource costs would have been included, the schedule update principles would remain the same. The onlydifference would lie in the calculations of the PAC and PRC values.

SOURCE: PMKNOWLEDGECENTER

Schedule % Complete in Oracle Primavera – The Missing Guide

Project Controls Tutorial – Planning

http://www.projctrl.com/category/planning/[02/05/2013 23:30:36]

Schedule % Complete in Oracle Primavera – The Missing Guide

Schedule % Complete is one of the many percent completes you have in Primavera P6 and we’re going to have acomplete look at what it is and how it is calculated. Two important products of maintaining schedules are plannedprogress and actual progress of a given time; you want to know how much you’ve done so far and compare it withhow much you were supposed to do so far, in order to reach project targets.

The first thing to mention is that Schedule % Complete deals with planned progress. As a result, it is calculatedbased on the Project Baseline and the Data Date; it has nothing to do with the current schedule.

The second thing is that this field is calculated differently for Activities than for WBS Elements. This is the sourceof the most common problems people have with this field.

Schedule % Complete for Activities

And now, let’s start the story with how Schedule % Complete is calculated for Activities. It’s simple; just take alook at the following figure.

When the Data Date isearlier than theBaseline Start date,Schedule % Completeis zero, when it’s afterthe Baseline Finishdata, Schedule %Complete is 100%.Otherwise, Schedule %Complete would showwhat percentage of theBaseline duration ispassed by the DataDate. Here’s a formulato calculate ActivitySchedule % Complete:

Schedule %Complete(Act) = ( [DataDate] – [Baseline Start] ) /( [Baseline Finish] –[Baseline Start] )

The following diagramshows the Schedule % Complete of a single Activity for different Data Dates:

And that’s all for theactivities; it has

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nothing to do with thecurrent schedule, theresource curves, thecosts, etc. ForActivities, Schedule %Complete is strictlycalculated based on:

1. Data Date2. Activity’s Baseline

Start3. Activity’s Baseline

Finish

Schedule %Complete for WBS

Elements

And now, the story of how Schedule % Complete is calculated for WBS Elements. Let’s start by reviewing 2possible scenarios:

Scenario 1

How are thesecalculations possible?The Sample WBSElement has three

Activities, they all have Schedule % Completes greater than zero, but the value for Sample WBS Element is 0!Before I reveal the answer, here’s a contrasting scenario.

Scenario 2

In this scenario, theSample WBS Elementhas three Activitieswith Schedule %Completes less than50%, but the Schedule

% Complete of the WBS Element is 75%.

What is going on here? How is Schedule % Complete calculated in each scenario?

A WBS Element’s Schedule % Complete is calculated in a completely different way. You might expect it to be therollup value of the underlying Activities (a weighted average for example). But, as in scenario 2, the three Activity

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values which are all less than 50% could never have a weighted average more than 50%.

As you saw before, the Schedule % Complete of the Activities is time-based. However Schedule % Complete forWBS Elements is:

1. Depended project costs and…2. Does not factor in any Activities’ Schedule % Complete values

How Schedule % Complete is Calculated for WBS Elements

When you assign resources and expenses to activities, each activity will receive a calculated Total Cost. Resourceassignment hours and costs are, by default, spread uniformly over the duration of the activity (but you may apply aResource Curve to alter this). Oracle Primavera will show you how costs are then planned for each day of theActivity. These costs are aggregated to the WBS level, and the time-phased cost of the WBS Element will becalculated automatically.

The Schedule %Complete of the WBSElement will be theratio of the BaselineCosts before the DataDate to the TotalBaseline Cost.

In the world of EarnedValue, the costs beforethe Data Date arecalled the PlannedValue, or PV for short(Also called BCWS –Budgeted Cost ofWork Scheduled). Thetotal baseline cost iscalled Budget AtCompletion or BAC forshort. We can nowformulate the

calculation of Schedule% Complete for WBSElements as:

Schedule % Completed

(WBS) = PV / BAC

Please have this in mindthat all the mentionedparameters are derivedfrom baseline and not

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from current schedule;the WBS bar shown inthese figures is thebaseline schedule of theWBS Element and thecosts are the baselinecosts of the WBSElement.

The following diagramshows Schedule %Complete of a sampleWBS Element fordifferent Data Dates:

The above descriptionsshow that the Schedule% Complete of theWBS Elements dependon the following:

1. Data Date2. Baseline Costs before

the Data Date (PV)3. Total Baseline Costs

(BAC)

To summarize,Schedule % Completefor Activities is basedon time, while its valuefor WBS Elements isbased on costs.

Pulling Schedule %Complete together

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for WBS andActivities

The following diagramshows Schedule %Complete of a sampleWBS Element with twoActivities in differentData Dates.

The Proper Setup :Baselined and Cost-loaded

Now let’s see howSchedule % Completeworks in action on asample Primavera P6plan.

Since Schedule %Complete is based onboth Project Baselinefields and Earned ValueCost fields, to calculate

it properly, your schedule should:

be cost-loaded at the Activity-levelhave a project baseline set

Examine the sample plan below. This plan has four WBS Elements in two levels and seven Activities. Activitieshave sample durations and relationships and you can see the current schedule in the Gantt chart. Each Activity has

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a resource assignment and that’s why we have costs in the plan. Some Activities have uniform resource curves,while others use At-Start, At-Finish or Bell-Shaped resource curves.

The project baseline ismaintained andassigned. The baselineschedule is shown by theyellow bars in Ganttchart. The currentschedule and thebaseline are the samenow.

Examining Schedule% Complete forActivities

I will reschedule theplan for the second day,moving the Data Dateforward 1 day.

There are no actualsentered, but as we sawin Part 1, Schedule %Complete has nothing todo with the currentschedule or actual data.The Schedule %Complete column showsthe current values; forexample, take a look atA4:

The Data Date haspassed half of thebaseline schedule of A4,which would be theSchedule % Complete of50%.

Sometimes you havenonworking days in theschedule; in this cases,those days would not be

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counted in passed andtotal baseline days (asusual).

Schedule %Complete for WBS

Let’s examine WBS E-2.

WBS E-2 has thefollowing values:

PV (Planned Value Costcolumn) = $240BAC (BL Project TotalCost column) = $400

The WBS Schedule %Complete is calculatedas PV / BAC = $240 /$400, or 60%.

How BAC and PV arecalculated for WBS?

1. BAC – Budget at Completion

BAC for the WBS Element E2 is the sum of the A6 and A7 BACs. Think of this as the sum of the Total Cost foreach Activity (see diagram above) but taken from the project baseline.

2. PV – Planned Value

Planned Value (PV) is bit trickier as it related to how your schedule is cost-loaded in a time-phased manner.

The Activity Usage Spreadsheet, shown in bottom half of the screen below, is handy for analysing planned valuefor Activities.

The bottom layout is set

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to show timephasedvalues of the CumulativePlanned Value Costsusing the Activity UsageSpreadsheet. Why usethe Cumulative PlannedValue Cost field?Because it’s essentially arunning total. With thatin mind, in this view wecan quickly see arunning total PV for theWBS at any day in theproject.

PlannedValue….elaborated

Planned Value taked intoaccount Resource

Curves. Let’s explore Activity A6.

A6 has a uniform curve and it has only two working days, $80 planned for each one. $80 for the first day, and thecumulative value remains 80$ for the next two nonworking days, then increases to $160 in the last day.

ActivityA7 has an “AtStart” resource curveassigned. All of A7′splanned cost will beloaded to the first dayand the cumulative valueof the next days wouldbe the same.

No matter how theActivity planned valuesare distributed over time,the WBS’s plannedvalues are the total of theActivities’ plannedvalues.

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The Data Date in theprevious sample was thesecond day of theproject and PV of thelast WBS Element is240$ in that day. If wechange the Data Date tothe sixth day, its PVwould be $320. Thefollowing figure showsthe values with the DataDate set to day six of theproject.

When Things Don’tAdd Up – A Scenariousing ResourceCurves

Before wrapping up,let’s look at a trickyscenario; I made somechanges and re-baselinedthe schedule. Check thevalues for WBS E.1.1.

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As you see, WBS E.1.1and all of her underlyingActivities have costs.Two Activities haveSchedule % Completevalues that are greaterthan zero and the WBSElement’s value is stillzero. Why?

I believe you can say;when Schedule %Complete of the WBSElement is zero, youshould expect that thePV is also zero. How isit possible for the PV tobe zero when Data Datehas passed half of thebaseline duration? Theanswer is simple: theActivity costs are notuniform…. because ofResource Curves.

All of these threeactivities’ costs have “AtFinish” curve. Thefollowing figure isfocused on the A2:

Many planners useResource Curves in theirschedules to properlydistribute labor hours andcosts across an activity’sduration. But keep inmind that ResourceCurves can causescenarios like this one toconfuse and puzzle you,if you are calculating andfinding strange values for

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Schedule % Complete.Here’s another reason toknow your scheduleintimately.

Wrap Up

To conclude, you shouldnever expect WBSElement’s Schedule %Complete to be a rollupof the underlyingActivities’ Schedule %Complete, because theyare calculated in twocompletely differentways.

That’s the whole story ofthe Schedule %Complete. In everycontrol period, you willenter actual data (actualstart, actual finish, and atleast one element relatedto the progress of the in-progress activities) andreceive planned andactual progress. Plannedprogress is to be readfrom Schedule %Complete as percentagevalues or Planned ValueCost as monetary values(based on yourpreference). Plannedprogress of the wholeproject is read fromSchedule % Complete ofthe project row (lowest

level of EPS or highest level of WBS). It’s sometimes necessary to also report on planned progress of the first twoor three levels of WBS, which can be done by reading the Schedule % Complete of the appropriate WBSElements. You might not find it suitable to read the planned progress of the activities from Schedule % Complete,because it’s not based on their assignment curves, unless your method of calculating the actual progress is notusing the assignment curves too.

SOURCE: PLANNER TUTS

Project Controls Tutorial – Planning

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By projectcontrolstutorial | Baseline Scheduling, Planning, Primavera, Project Controls, Project Controls Tutorial, Reviewing Schedule,

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Duration Percent Complete in Primavera P6 – The Missing Guide

Duration Percent Complete in Primavera P6 – the Missing Guide

There are many different methods for calculation of actual progress in Primavera P6. These methods involve usingmany fields and settings, including:

Duration % CompleteUnits % CompletePhysical % CompletePercent Complete TypeActivity % CompletePerformance % Complete

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Earned Value settings of the WBS Elements

I will explain Duration % Complete in this article. Other fields and settings will be explained in future articles andwe will finally have a complete picture of the whole actual progressing system in Primavera P6.

Primavera P6′s 3 Types of Activity Percent Complete

Each activity has three percent complete fields that are calculated all the time:

1. Duration % Complete2. Units % Complete3. Physical % Complete

Only one of these values will be selected by the user as the activity’s progress, even though all of them arecalculated all the time. I will explain how to choose the appropriate activity percent complete in future articles.

Duration % Complete Calculations

The most common problem with Duration % Complete is that Primavera P6 uses a counterintuitive formula. Youmay expect it to be something like Microsoft Project’s formula:

Duration % Complete(MS Project) = [Actual Duration] / ( [Actual Duration] + [Remaining Duration] )

But this is not the P6 formula. Duration % Complete is calculated with this formula:

Duration % Complete(P6) = ( [Original Duration] – [Remaining Duration] ) / [Original Duration]

This formula uses Original Duration, which may be different from the current duration. We will check this on thefollowing sample.

Sample: We have an activity with original duration of 20 days. 15 days have passed and we estimate it to finish in18 days (yes, it’s much longer than we expected initially). The Original Duration does not change automaticallyafter activity’s start.

Original Duration: 20d Actual Duration: 15d Remaining Duration: 18d

[Duration % Complete] = (20-18)/20 = 10%

Intuitive or MSP-like Duration % Complete = 15/(15+18) = 45.45%

The following figure shows the initial state of this sample activity (named A1):

Let’s say that theactivity has started inMay 8th. We’llcheck the Startedcheckbox and enterthe actual start date inits date box.

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Learn Primavera P6Duration PercentComplete

Suppose that it’scurrently May 27th;we will reschedule theplan for this data date.

The Actual Durationis automaticallycalculated based onActual Start Date andthe Data Date, asfollows:

[Actual Duration] =[Data Date] – [ActualStart] (P6 formula forin-progress activities)

Unfortunately, youcannot change theActual Duration fieldmanually.

Now we can enter theremaining duration. Inthis example, weestimate that A1requires 18 more daysto be completed.We’ll enter 18d inremaining durationfield. By entering aremaining duration,Duration % Completewill be calculatedautomatically.

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In this case,Duration %Complete iscalculated as 10%.

We could haveentered the Duration% Complete insteadof the RemainingDuration and P6would have calculatedRemaining Durationautomatically . Now,take a look at theGantt chart.

When you look at theGantt chart, you seethat about half of thecurrent duration isactualized and youmay expect aDuration % Completeof around 50%. Theexact number of theintuitive formula is45.45% in thisexample, which is notequal to our Duration% Complete.

Changing theOriginal Duration

Primavera P6 uses thefollowing equationfor Original Durationis used when anactivity is not yetstarted:

[Original Duration] =

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[Early Finish] –[Early Start]

However, after theactivity has started,Original Durationwill not beautomaticallycalculated by EarlyStart and EarlyFinish, and you canchange it manually.The At CompletionDuration representsour current duration,calculated as:

[At Completion Duration] = [Actual Duration] + [Remaining Duration]

In our example, the At Completion Duration is calculated to be 33d. We will enter the same value for theOriginal Duration field and this would be the result:

The activity’s scheduleis not changed, butDuration % Completeis recalculated basedon the new OriginalDuration; and yes, it’sthe intuitive value thatwe calculated before.When OriginalDuration is equal tothe At CompletionDuration, the Duration% Complete will havethe intuitive value. Thefollowing equationsshow how the P6formula would becomethe intuitive formula,when the Original

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Duration is equal tothe At Completion Duration:

[Duration % Complete]* = ( [Original Duration] – [Remaining Duration] ) / [Original Duration]

= ( [At Completion Duration] – [Remaining Duration] ) / [At Completion Duration]

= [Actual Duration] / ( [Actual Duration] + [Remaining Duration] ) * this equation is based on the assumption thatOriginal Duration is equal to the At Completion Duration.

If you would like to have the intuitive Duration % Complete (for any reason), you can create a global change to setthe Original Durations of in-progress activities. The following figure shows the appropriate global change setup.

This global changechecks each activity’sstatus; if it’s “InProgress”, then the AtCompletion Durationwould be copied to theOriginal Duration. Wewill then have theintuitive Duration %Completes for allactivities.

Duration %Complete for WBSElements

The previous explanation was focused on Duration % Complete for Activities. Duration % Complete is alsocalculated for WBS Elements, but I strongly recommend you not to use Duration % Complete to track a WBSElement’s progress. Thus I have not included an explanation of the calculations here.

You should always think of Duration % Complete as an intermediate field and use Performance % Complete totrack activities and WBS Element’s actual progresses.

I will explain the calculation and usage of Performance % Complete in a future tutorial.

Summary

This tutorial has demonstrated the internal calculations of Primavera P6′s Duration Percent Complete field.

The most common problem in this area is that Primavera P6 does not use the intuitive formula for Duration %Complete which confuses some planners and project managers. We explained the Primavera P6 calculations andthe intuitive formula side by side, to show the differences and create a better understanding of the P6 method.Finally, if you absolutely need to use the intuitive formula, try the Global Change described above.

SOURCE: PLANNER TUTS

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