Performance measurements are in place to help a project be successful. Performance measurements help project managers to evaluate where the project is and if there is anything that needs fixed or altered to complete a successful project. Cost variance, schedule variance, and frequency counts are three measurements that can be used within a project to evaluate the project and make sure everything is on track.
“Budgeted cost for work scheduled (BCWS) is the budgeted amount of cost for work scheduled to be accomplished plus the amount or level of effort or apportioned effort scheduled to be accomplished in a given period of time. Budget cost for work performed (BCWP) is the budgeted amount of cost for completed work, plus budgeted for level of effort or apportioned effort activity completed within a given time period. Actual cost for work performed (ACWP) is the amount reported as actually expended in completing the work accomplished within a given time period” (Kerzner, 2006). This means the calculation for cost variance is the budget cost for work performed minus the actual cost for work performed which equals the cost variance. A positive answer means that the project is under budget. A negative answer means that the project is over budget, also called a cost-overrun condition. “The cost variance compares deviations only from the budget and does not provide a measure of comparison between work scheduled and work accomplished” (Kerzner, 2006).
The calculation for schedule variance is to subtract the budgeted cost for work scheduled from the budgeted cost for work performed which equals the schedule variance (SV). A positive variance means a project is ahead of schedule. If there is a negative variance it means the project is in a behind-schedule position. “The schedule variance provides a comparison between planned and actual performance but does not include cost” (Kerzner, 2006)....