Bcwp/bcws

[emilslx]

Dear friends,

I can't understand the difference between BCWP and BCWS. Budgeted cost
of works performed and works scheduled. At the first sight, they are
the same. Can anybody bring examples or explain in which cases they may
differ?

Thank you!
Emil

 

[Jim Aksel]

I think of it this way. BCWS is your bid to do the work. BCWP is the value
of what you accomplished.

Example: I bid to paint a fence at $25/hr and I believe I can paint
10ft/hr. Since there is 100 Feet of fence my bid is: $25/hr x 1hr/10ft x
100 feet = $250. That is I estimate that I can paint the fence in 10 hours.
My bid is $2.50/foot =$250. Let's assume I do the work myself (I'd
actually pay the painter $15/hr but that will make it too complicated).

So, I work 4 hours and actually paint 60 Feet of fence.
BCWS = 4hr x 10ft/hr x $2.50/foot = $100 the value of my scheduled work.
BCWP is the value of what I performed (using the same rules as BCWS).
BCWP= 60 ft x $2.50/ft = $150. I would expect to be paid this much, it is
the value of what I performed.

Actual Cost of Work Performed (ACWP) = $25/hr x 4 hours = $100 (I did the
work)

Other trivia:
Cost Performance Index (CPI)=BCWP/ ACWP = 150/100 = 1.50 (>1 is good, I am
under running)
Schedule Performance Index BCWP/BCWS = 150/100 = 1.50 (I am 50% ahead of
schedule, greater than 1 is good).

If I paid the painter to do it, ACWP=4x15=$60 and CPI=150/60=2.5 while SPI
stays the same.

At this rate, I will expect to finish early and with a total cost of less
than my bid. So I will make more money than I planned.

I always ask myself the question: "If I had to bid what I just
accomplished, what would have I bid using my original rules?" That is the
value of BCWP.

You can learn a lot more about this by using the search term "Earned Value
Management" in the Project Help files or on the search engine of your choice.
There is a good book on the market called "Earned Value Project Management"
by Quentin Flemming. It is available at amazon or at www.pmi.org (go to
their bookstore).

--
If this post was helpful, please consider rating it.

Jim
It''s software; it''s not allowed to win.

Visit http://project.mvps.org/ for FAQs and more information
about Microsoft Project

 

[Mike Glen]

Hi emilslx,

Welcome to this Microsoft Project newsgroup

Scheduled work is what you planned to happen, and work performed is what
actually happened.

FAQs, companion products and other useful Project information can be seen at
this web address: http://project.mvps.org/faqs.htm

Hope this helps - please let us know how you get on

Mike Glen
MS Project MVP
See http://tinyurl.com/2xbhc for Project Tutorials

 

[Ray Stratton, PMP, EVP]

Hi emilslx,

Welcome to this Microsoft Project newsgroup

Scheduled work is what you planned to happen, and work performed is what
actually happened.

FAQs, companion products and other useful Project information can be seen at
this web address:http://project.mvps.org/faqs.htm

Hope this helps - please let us know how you get on

Mike Glen
MS Project MVP
Seehttp://tinyurl.com/2xbhcfor Project Tutorials











- Show quoted text -

The term BCWS is really the time phased budget for scheduled work and
is usually plotted over time. It may be related to the bid for a job,
or not. In formal EVM BCWS excludes profit and contingency funds. If
your schedule is resource loaded and costed then the planned cost is
the BCWS for each period, and cumulative. BCWP is portion of BCWS you
"earn" for getting work done. An objective and independent assessment
of the percent complete for each task underway provides the BCWP for
the task. Independent means without regard to the time, staff-hours,
or funds spent on the task since none of these data give any insight
to what was really accomplished. Cumulative BCWP never exceeds BCWS.
ACWP is just the incurred cost. PV, EV, and AC are generally replacing
the BCWS, BCWP, and ACWP terms. Other books include the PMI Practice
Standard on EVM and my book at http://www.managementconcepts.com/publications/project_management/evm3.asp.

 

[Jim Aksel]

All of this is great; I tried to give emilslx a most simple example. There
is one point in your post I disagree with:
It is incorrect to say "Cumulative BCWP never exceeds BCWS."

I see cBCWP>cBCWS frequently.
SPI=BCWP/BCWS

If SPI exceeds 1.0 (you are ahead of schedule) then BCWP will exceed BCWS.
This is true for both monthly and cummulative data. At the end of the
contract cBCWP=cBCWS since you cannot earn more than you scheduled on a
cummulative basis at the end. Actually, it would be OK to call it quits any
time during the contract --- if that were to happen when BCWP>BCWS then you
would be in an odd situtation. You would have to take some adjustments to
get the two equal at close. If cBCWP<cBCWS at close, then you would write
down cBWCS to reflect cBCWP at close.

It would be fair to say, "Murphy's Law will not allow BCWP to exceed BCWS"
--
If this post was helpful, please consider rating it.

Jim
It's software; it's not allowed to win.

Visit http://project.mvps.org/ for FAQs and more information
about Microsoft Project