Productivity, Performance, & Earned Value

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  • 1.  (EVM-4408) Basics of Earned Value Management – How & Why, 2024 article

    Posted 07-29-2024 11:49 PM

    Just reading this article to learn earned value. Don't understand how the weighting is used in calculations.  The author say 1000 feet of pipeline, in two sections, a large and a small bore. 50 feet was completed for the large bore and 75 for the small bore. The table show gate weight of 55% and 45%. Hard to figure out how the weighting is used.

    Current budget and the BAC is 1000 x 3 or 3000. Earned hours should be 50 x 3 + 75 x 3 = 375 hours

    Earned percent complete is 375/3000 or 12.5%.  Article say - having installed a total of 125 feet of the 1,000 feet of budgeted pipe.  For every hour budget is 3 hours and each hour earned on any installed amount must be 3 hours.

    The answer in the article say 6.13%. This does not look right because the formula is applied by using the 55% and the 45%.  From the article calculations if the whole 1000 feet work is completed, 550 feet of large bore and 450 feet of small bore, the total earned value from the table 6 is less than the budget.

    Can you help.



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    Mike P
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  • 2.  RE: (EVM-4408) Basics of Earned Value Management – How & Why, 2024 article

    Posted 08-19-2024 03:56 PM

    Hey Micheal,

    Great question.  Do you have the article?  I would like to take it apart.  But some of the factors are typically developed based on the project, SME's input, past performance, regulations, and company documentation.  But if the factors are included, then we should be able to replicate the performance.  



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    Michael Marcell
    Vice President
    Bethesda MD
    mmarcell@k2consulting.com
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  • 3.  RE: (EVM-4408) Basics of Earned Value Management – How & Why, 2024 article

    Posted 08-20-2024 09:11 AM
      |   view attached

    Hola Michael:  The article is AACE Ref.#: 23630.  The title is, Basics of Earned Value Management–How & Why. 



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    Michael Persaud
    Columbus
    taradep@gmail.com
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    Attachment(s)

    pdf
    23630.pdf   473 KB 1 version


  • 4.  RE: (EVM-4408) Basics of Earned Value Management – How & Why, 2024 article

    Posted 10-25-2024 11:02 AM

    Apologies for the delay in response, hopefully I can provide some guidance to your questions below:

    Just reading this article to learn earned value. Don't understand how the weighting is used in calculations.  The author say 1000 feet of pipeline, in two sections, a large and a small bore. 50 feet was completed for the large bore and 75 for the small bore. The table show gate weight of 55% and 45%. Hard to figure out how the weighting is used.

    The weighting is derived from the quantity of large bore and small bore pipe being installed. Since the budget is 1000 ft and the planned quantity of large bore is 550ft and planned quantity of small bore if 450ft, the Gate % Weights are derived from 550/1000 and 450/1000. Those weightings are needed for the Weighted % calculation field where you take the Gate % Complete for each control account and multiply it by the Gate % Weights mentioned above. This field ultimately scales the % complete for each control account according to the weight that is assigned to each control account. 

    Current budget and the BAC is 1000 x 3 or 3000. Earned hours should be 50 x 3 + 75 x 3 = 375 hours

    Earned percent complete is 375/3000 or 12.5%.  Article say - having installed a total of 125 feet of the 1,000 feet of budgeted pipe.  For every hour budget is 3 hours and each hour earned on any installed amount must be 3 hours.

    The answer in the article say 6.13%. This does not look right because the formula is applied by using the 55% and the 45%.  From the article calculations if the whole 1000 feet work is completed, 550 feet of large bore and 450 feet of small bore, the total earned value from the table 6 is less than the budget.

    I'm seeing the same issue you are. The problem is that in Figure 6 each control account has a Total Budget Qty of 1000ft (which can be seen in the Gate Qty % Calculation field). However, in the paragraphs above it states that there is 550ft of large bore and 450ft of small bore being installed. I believe this is the issue, if you use total budget quantities of 550ft and 450ft respectively for each control account, rather than 1000ft for each, that will get the answer you're looking for. 

    If you recalculate this problem using the proper total quantities, then you get the same earned value of 375 hrs that you listed above. Hope this answer helps, please let me know if you have any other questions.



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    Kyle Palmer
    Consultant
    Dallas
    kpalmer@k2consulting.com
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  • 5.  RE: (EVM-4408) Basics of Earned Value Management – How & Why, 2024 article

    Posted 10-26-2024 11:18 PM
    I concur.  The divisor needs to be 550 and 450 respectively in Gate Qty percent calculation column in fig 6 of the published article.  This change will provide the correct earned value.





  • 6.  RE: (EVM-4408) Basics of Earned Value Management – How & Why, 2024 article

    Posted 10-28-2024 12:35 PM

    Many thanks, Kyle, for looking at my questions.

    My query on the gate percentage was "Hard to figure out how the weighting is used." I understand the weighting is based on the 550 and 450 divided by 1000. What is not clear is why there is a need for weighting in quantity-based earned value?

    In Figure 5, the Gate % Weight has no bearing in quantity-based EV. It does in Figure 4, because each engineering deliverable is progressed based on passing a gate. In Figure 5, for quantity-based EV, the progress is based on % complete of the respective quantity.

    The issue is further compounded in Formula 2, where the actual quantity is divided by the total for the Large Bore (50/550) and then multiplied by the 55% weight. Looks incorrect because with 550 as the denominator, there is no need to multiply with 55% weight. The weight is already in the 550.

    As you suggest the problem with Figure 6, each control account has a Total Budget of 1000 ft and correctly it should be 550ft and 450ft.

    In Table 6, the Gate Qty should simply be 50/550 and 75/450 for each control account. Using a Gate % Weight as the numerator you get 55% x Quantity installed/Total, which is not correct.

    The % installed for Large bore is 50/550 or 9.09% and the EV is 9.09% x 1650 (the current budgeted hours).

    I agree with your math. It seems for a quantity-based EV, the article is roundabout, thus the error in the article.

    Figures 5 and 6 and Table 2 should be modified and eliminate Gate % and the calculation would be simpler and less prone to error for quantity-based EV.

    Regards, MP



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    Michael Persaud
    Columbus
    taradep@gmail.com
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