Day 2

1. Planning & Iron Triangle

2. Project Management Plan

3. 3Project Management Plan
The Project Management Plan (PMP) is a formal, approved document used to manage project execution. The PMP
documents the actions necessary to define, prepare, integrate and coordinate the various planning activities. The
PMP defines how the project is executed, monitored and controlled, and closed. It is progressively elaborated by
updates throughout the course of the project. The PMP is also a communication vehicle for ensuring key stakeholders
share an understanding of the project. The PMP is NOT a project schedule. A project schedule lists planned dates for
performing tasks and activities to meet milestones identified in the project plan.

4. 4Project Management Plan TOC

5. Critical Path Method

6. 6Develop Schedule
To develop your project schedule, you'll need to do three things first...
• Define Activity
• Sequence Activity
• Estimate Activity Durations
1. Define Activity
The first step to developing your schedule is to define the specific activities that need to be performed in order to
complete the project.
2. Sequence Activity
Once your activity list is ready, the next step is to determine the order each of the activities needs to be completed in.
3. Estimate Activity Durations
The third step is to estimate how long each activity will take to complete. This needs to take into account the type,
amount, and availability of people, material, equipment and supplies that are needed to perform each activity.

7. 7Activity Dependency

8. 8Critical Path Method
Critical path schedules...
• Help you identify the activities that must be completed on time in order to complete the whole project on time.
• Show you which activitys can be delayed and for how long without impacting the overall project schedule.
• Calculate the minimum amount of time it will take to complete the project.
• Tell you the earliest and latest dates each activity can start on in order to maintain the schedule.
The CPM has four key elements...
• Critical Path Analysis
• Float Determination
• Early Start & Early Finish Calculation
• Late Start & Late Finish Calculation

9. 9Activity Dependency

10. 10Activity Dependency
Critical path schedules...
• Help you identify the activities that must be completed on time in order to
complete the whole project on time.
• Show you which activities can be delayed and for how long without impacting the
overall project schedule.
• Calculate the minimum amount of time it will take to complete the project.
• Tell you the earliest and latest dates each activity can start on in order to maintain
the schedule.
The CPM has four key elements...
• Critical Path Analysis
• Float Determination
• Early Start & Early Finish Calculation
• Late Start & Late Finish Calculation

11. 11Critical Path Method

12. 12Float

13. 13Early Start & Early Finish Calculation
The Critical Path Method includes a technique called the Forward Pass which is used to determine the earliest date an activity can
start and the earliest date it can finish. These dates are valid as long as all prior activities in that path started on their earliest start
date and didn't slip.
Starting with the critical path, the Early Start (ES) of the first activity is one. The Early Finish (EF) of an activity is its ES plus its
duration minus one. Using our earlier example, Activity 2 is the first activity on the critical path: ES = 1, EF = 1 + 5 -1 = 5.
You then move to the next activity in the path, in this case Activity 3. Its ES is the previous activity's EF + 1. Activity 3
ES = 5 + 1 = 6. Its EF is calculated the same as before: EF = 6 + 7 - 1 = 12.
If an activity has more than one predecessor, to calculate its ES you will use the activity with the latest EF.

14. 14Late Start & Late Finish Calculation
The Backward Pass is a Critical Path Method techique you can use to determine the latest date an activity can start and the latest
date it can finish before it delays the project.
You'll start once again with the critical path, but this time you'l begin from the last activity in the path. The Late Finish (LF) for the
last activity in every path is the same as the last activity's EF in the critical path. The Late Start (LS) is the LF - duration + 1.
In our example, Activity 4 is the last activity on the critical path. Its LF is the same as its EF, which is 14. To calculate the LS, subtract
its duration from its LF and add one. LS = 14 - 2 + 1 = 13.
You then move on to the next activity in the path. Its LF is determined by subtracting one from the previous activity's LS. In our
example, the next Activity in the critical path is Activity 3. Its LF is equal to Activity 4 LS - 1. Activity 3 LF = 13 -1 = 12. It's LS is
calculated the same as before by subtracting its duration from the LF and adding one. Activity 3 LS = 12 - 7 + 1 = 6.
You will continue in this manner moving along each path filling in LF and LS for activities that don't have it already filled in.

15. Earn Value Metrics

16. 16Earn Value Metrics
Earned Value measures performance against a plan at a given point in time.
Term Full Name Meaning
PV Planned Value Estimated value of the work planned to be done
EV Earned Value Estimated value of the work actually accomplished
AC Actual Costs Actual Costs Incurred
BAC Budget At Completion Amount budgeted for total project
EAC Estimate At Completion Currently expected total for project
ETC Estimate To Complete How much More to finish
VAC Variance At Completion How much over/under we expect to be

17. 17Formula
Earned Value Formula
Name Formula Meaning
Cost Variance CV=EV-AC -ve=over budget, +ve=under budget
Schedule Variance SV=EV-PV -ve=behind schedule, +ve=ahead schedule
AC Actual Costs Actual Costs Incurred
Cost Performance
Index (CPI)
CPI=EV/AC We are getting _ cents out of every $ spent
Schedule Performance
Index
SPI=EV/PV We are progressing at _% of the rate originally planned
Estimate At
Completion
EAC=BAC/CPI As of now, how much do we expect the total project to cost
Estimate To Complete ETC=EAC-AC How much more to finish
Variance At
Completion
BAC-EAC How much over/under we expect to be

18. 18Example
Let’s imagine our project is to build a wall around a garden. Assuming 4 equal sides, a budget of $200 per side and
a schedule of 1 side per day. We should be finished in 4 days for a total of $800. If, after Day 3, our progress is as
follows:

19. 19Calculation
Name Formula Day 3 Value
PV - Planned Value Estimated value of the work planned to be done
Should have done 3 x $200 = $600 or
Percentage Complete 75%
SV=EV-PV Estimated value of the work actually accomplished
Actually done 2.5 sides $200+$200+$100 = $500 or
Actual Percentage Complete 62.5%
AC - Actual Costs Actual Costs Incurred $200+$220+$140=$560
Cost Performance Index Over / Under Budget factor CPI = EV / AC $500 / $560 = 0.89
Schedule Performance Index Ahead / Behind Schedule factor SPI = EV / PV
$500 / $600 = 0.83 0r
62.5%/75%% = 0.83
BAC - Budget At Completion Amount budgeted for total project $800
EAC - Estimate At Completion ETC=EAC-AC Currently expected total for project EAC=BAC / CPI
ETC - Estimate To Complete How much more to finish? ETC = EAC - AC $899 - $560 = $339
VAC - Variance At Completion
How much over/under we expect to be VAC = BAC –
EAC
$800 - $899 = -$99