According to investigations by Singh and Lakanathan (1992), the application of “S curves” for cash flow projections can achieve accuracies of approximately 88–97%, and the shape of the S-curve budget versus time is a quick way to judge performance. Such graphs can be very effective in project reviews. When one divides the current SV (at time, t) by the PV Rate, one is assuming that the average PV Rate applies for all time. Anbari, F. T. (1985). Even if one assumes that the current project performance is an excellent predictor of future performance (assumption #3), one still needs to assume that: 1) the current values of CPI and SPI are constant; and 2) that they are representative measures of the entire future performance of the project. Exhibit 8 – Estimation of CPI(t) and SPI(t). When corrective actions are implemented, the changes in the behavior of the indexes reveal the impact of the changes. There is an initial period of build-up, a period of peak loading, followed by a period of progressive demobilizing. The quadratic in equation (18) has a straightforward solution: Therefore, we can calculate the schedule over-run, τ, from SV(t). When graphs of CPI and SPI are changing over time, which is the usual case, the critical question becomes “How do CPI and SPI evolve over time?”. Increasing costs and the same revenues or cash inflows - which is often the case for project-based companies - means less profit. This can easily be seen by examining the behavior of SV at the end of the project. The number of people working on a project as a function of time, m(t), is given by: T is a constant that denotes the time at which the number of people is at the maximum—the labor peak. Let's imagine that a construction project involves building 4 apartments. Newtown Square, PA: Project Management Institute. New York: McGraw-Hill. Being disciplined with our key macro level stats and metrics is crucial to good project management and ultimately delivering on time and on budget - but it's crucial that project managers and companies understand and control the levers impacting efficiency on the ground or in the field too. At the 6 month mark, the company has spent $1,100,000 and completed 1 apartment - or 25% of the project. One of the characteristics that is immediately obvious from Exhibit 7 is that the calculation is much easier to accomplish using the instantaneous values. The cumulative Earned Value (EV) is found by the same process as for the cumulative Actual Cost—integrating. = 0.4 × 52 + 0.2 × 27 + 0.2 × 17 + 0.2 × 90 Using this model, Warburton calculates the cumulative Actual Cost, AC(t), by integrating, exactly as in equation (4). A number of features of the instantaneous representation make it more practical to use: the linearity of the curves make the data easier to analyze—it is always harder to estimate quantities from curves; and the greater deviations of the actual costs and earned values on the linear chart make them easier to recognize and compute. In this paper, we will make some progress in answering these questions by developing a model that predicts the behavior of the EVM parameters over time. In the early stages of a project, the labor curve is linear, and given by the first part of equation (3). Looking at Exhibit 8, one sees that the threeestimates for CPI(t) appear to be rising. For a schedule over-run prediction to be reasonable, one should expect that its estimation remain constant over the life of the project. Therefore, the curve for PVI(t) follows the same curve as the instantaneous labor rate, c(t). Further developments in earned schedule. What can be learned of practical value? We would like to know how late the project is going to be by decoding the behavior of SPI(t) over time. Exhibit 1 – Actual (Histogram) and Model (Trapezoidal) Labor Curves for a Construction Project. Earned schedule – A quantum advance. By Khan, Zahid Are we measuring the right key performance indicators (KPIs)? As noted by Fleming and Koppelman (2000) and Kerzner (2006), at the end of the project, the SPI always approaches 1.0. The cost performance index formula is a simple one, and anyone who is familiar with earned value management calculations will be right at home using the CPI formula.