Schedule Updating and Project Control - Construction Project Scheduling and Control - page 198

2. Determine how much money you have earned 11 and how much money you
have spent.
3. Calculate the time (schedule) and money (budget) variances so far.
4. Analyze the causes for the major variances and determine possible remedies.
5. Extrapolate these variances to the end of the entire project.

To understand the math involved in EV analysis, consider the following simplistic
example.

Example 7.3

A contractor has agreed to build 30 dog houses in 90 days at a price of $800
per unit. Twenty days later, the contractor has finished 8 dog houses with an
actual total cost (that includes overhead and profit) of $6,800. What is the
status of the project?

Solution

The following analysis applies only if the work is sequential and not parallel
(that is, the contractor works on one unit until it is finished and then starts
the next unit, and so on). Linearity of production and no learning curve effect
are also assumed.

Total planned budget ( TB )= 30 units ∗ $800 each = $24 , 000 ,

Daily planned production = 30 units ∕ 90 days

= 0 . 33 units ∕ day ( or 3 days per unit ) ,

Daily planned budget = $24 , 000 ∕ 90 days = $266 . 67

= 0 . 33 units ∕ day ∗ $800 each = 266 . 67,

and

Percent complete = 8 ∕ 30 = 26 . 7 % .

After 20 days, the contractor's plan calls for 0 . 33 units ∕ day ∗ 20 days =

6 333. We call

this amount the budgeted cost for work scheduled ( BCWS ). In other words,
if everything (schedule and budget) work according to plan, in 20 days the
contractor will have finished 6.67 units and earned $5,333.
The contract price was $800, and the contractor actually finished 8 units,
so the contractor earned 8 ∗ $800 = $6 , 400 from the owner (disregarding

. 67 units to be finished, with a total cost of 6 . 67 ∗ $800 = $5 ,

11 Money earned = actual work quantity × contract unit prices