Amacom - Modern Project Management (Ocr) - 2001 ! - (By Laxxuss)

Page 122 figure 4 6 cost performance trend chart

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Unformatted text preview: t the beginning of a project when the staffing of the project is ramping up and project team members are learning how to work with each other. To get an idea of what a typical Cost Performance Trend Chart looks like, we have also included, in Figure 4- 6, a version of this chart for the example project at a later period of time. Even if the period cost performance ratio curve remains erratic over time, on a well-managed project the cumulative cost performance ratio curve should approach the value 1 asymptotically, because in the long run, the actual man-hour expenditure should be approximately the same as the earned manhours. It should be clear to the reader that a cost performance ratio that is greater than 1 is "good," while a cost performance ratio less than 1 is considered "bad." Consequently, project management looks to the Cost Performance Trend Chart and to the Schedule Performance Trend Chart to see if these ratios are tending toward the value of 1. Page 122 Figure 4-6. Cost Performance Trend Chart (later data) for example project. 4.3.5— The Schedule Performance Ratio Similarly, the Schedule Performance Ratio (SPR) for the project at time t is defined to be the ratio of the earned man- hours to the budgeted man- hours to-date at time t: where SPR(t) is the schedule performance ratio for the project at time t, E(t) is the earned man- hours at time t, and B(t) is the earned man -hours at time t. The Schedule Performance Trend Chart for the example project is shown in Figure 4-7. It can be produced by clicking on the Schedule Performance Chart button on the Main Menu. As with the cumulative cost performance trend ratio, the cumulative schedule performance trend ratio for the total project is just SPR(t) for each time t, so the cumulative schedule performance trend curve is just the graph of the function SPR(t) Page 123 Figure 4-7. Schedule Performance Trend Chart for example project. Similarly, the so- called period schedule performance ratio at some time t that represents the end of some month m is defined to be: where t –1 represents the end of the previous month. Everything that was said about the cost performance ratio is applicable to the schedule performance ratio. However, just because the schedule performance ratio curve is tending toward the value 1, we cannot conclude that tasks that are on the critical path of the schedule are all being executed on schedule. Conversely, the accomplishment of the tasks on the critical path on schedule does not necessarily mean the schedule performance ratio curve will eventually tend to 1. Either of these measures of schedule performance could signal schedule problems in the future. Page 125 Chapter 5— Productivity Measurement In Chapter 4, we discussed the earned value approach to project performance evaluation and the variance analysis approach to performance problem isolation. Project managers have used the earned value approach to performance evaluation since the 1960s. But the importance of productivity measurement was not recognized this early. One of the earliest papers to clarify the importance of productivity measurement was the author's 1984 paper "Managing Sof...
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