COST CONTROLCahyono Bintang Nurcahyo, ST, MT

Cost Management : an overview

PMBOK Guide, 2008Constraints

Project Managements Mapping

Control CostsEstimate CostsDetermine BudgetProject Cost Management

Project Cost Management

Project Cost ManagementEstimate CostsThe process of developing an approximation of the monetery resources needed to complete project activities.Determine BudgetsThe process of aggregating the estimates costs of individual activities or work packages to establish an authorized cost baseline.

Project Cost ManagementCost ControlThe process of monitoring the status of the project to update the project budget and managing changes to the baseline.

Cost Control

CC. Concept

CC. Tools & Techniques

Earned Value#1

Earned ValueEarned Value represent the amount of budget absorbed that you can claim representing the complete work (cost, time, scope)Earned Value Analysis / technique is a method of measuring project performance, by comparing the amount of work planned with what was actually accomplished to determine if cost and schedule performance is as plannedEnable the project manager to detect deviations from plan as soon as they occur and to take appropriate corrective action.

EV. The key valuesPlanned Value (PV): Estimated value of the work to be doneBudget at Completion (BAC): Budget for total workEarned value (EV): Estimated value of the work actually accomplishedActual Cost (AC): Actual cost incurred

EV. The key values

EV. The measurenmentCost Variance CV = EV - AC(+) = under budget(-) = over budgetSchedule Variance SV = EV - PV(+) = ahead schedule(-) = behind scheduleCost Performance Index CPI = EV/AC>1 performance of cost OK1 performance of schedule OK

EV. CV and SV

EV. CPI and SPI

EV. CPI and SPI

EV. Example #1

Planned Value (PV)

Sekarang kita berada pada akhir bulan kedua, tapi hanya 1 section track yang selesai. Maka, nilai dari Earned Value (EV) adalah = $1,000Bulan 2PV = $1,000Earned Value (EV)Akhir bulan ke-2PV = $2,000 RencanaEV = $1,000 Yang didapatkanCONTROL POINT : Akhir bulan ke-2

Tenaga kerja $1,300,Biaya material $1,100. Jadi biaya pada akhir bulan ke- 2 = $2,400Akhir bulan ke-2AC = $2,400 Pengeluaran AktualActual Cost (AC)CONTROL POINT : Akhir bulan ke-2

Illustration Summary

Cost Variance CV = EV - ACCV = $1,000 - $2,400 = - $1,400(-) = over budgetSchedule Variance SV = EV - PVSV = $1,000 - $2,000 = - $1,000(-) = behind scheduleCost Performance Index CPI = EV/ACCPI = $1,000/$2,400 = 0.42

Forecasting#2

ForecastingForecasting includes making estimates or predictions of conditions in the projectss future, based on information and knowledge available at the time of the forecast

Forecasting:Estimate at Completion (EAC)Estimate to Complete (ETC)

Parameter used to forecast : BAC, AC, & CPI

F. Estimate to CompleteETC is the estimate for completing the remaining work for a schedule activity.

New estimates:ETC = ETCbottom-upWork performed at the budgeted rate:ETC = BAC - EVConsidering both SPI and CPI factors:ETC = [ BAC - EV ] / [ CPIcumulative x SPIcumulative ]Ratio CPI/SPI = 80/20, 50/50, others

F. Estimate at CompletionEAC is a forecast of the most likely total value based on project performance

New estimates:EAC = AC + ETCbottom-upWork performed at the budgeted rate:EAC = AC + ( BAC - EV)Considering both SPI and CPI factors:EAC = AC + ( [ BAC - EV ] / [ CPIcumulative x SPIcumulative ] )Ratio CPI/SPI = 80/20, 50/50, othersWork performed at the present CPI:EAC = BAC / CPIcumulative

To-Complete Performance Index#3

To-Complete Performance IndexTCPI is the calculated projection of cost performance that must be achieved on the remaining work to meet a specified management goal, such as the BAC or the EAC.TCPI as the work remaining (BAC minus EV) devided by the funds remaining (BAC minus AC, or EAC minus AC)Formula TCPI = [ BAC - EV ] / [ BAC - AC ]Or TCPI = [ BAC - EV ] / [ EAC - AC ]

To-Complete Performance Index

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