PMI CAPM – Blitz Review of the CAPM Course Part 4

7. Manage Project Time Management

Welcome back to our Blitz review. We’re going to take a quick review of our time management processes. So this is something that is very important for your exam. We spent a lot of time in chapter six in the Pin box. So let’s hop in and we’re just going to hit the headlines here. Plan in schedule. Management. Our whole point is to establish our policies and define our procedures. So we document our approach for developing, managing and controlling the schedule. So we’re creating the schedule Management plan. So what does this plan do? It has the project schedule model development approach. Your level of accuracy.

Are you using hours, days, weeks? Organizational procedure links? Who talks to whom or reports to whom? How will you maintain your schedule? What about your control threshold? So if you’re late, how late is late in your project? So what’s an acceptable range of variance? How will you measure performance? Earned Value Management reporting formats, process descriptions talked about decomposition the scope into work packages.

Now we take our work packages and break it down to activities. This is where that idea of the 880 rule comes in that no work package will take less than 8 hours and not greater than 80. If it’s smaller than eight, it’s probably too small in your scope, in your WBS rather. And if it’s greater than 80 hours, it’s too big to break it down some more. In order to decompose project activities, you need the scope, baseline, EEF and OPA some planning components here control accounts. This is where we set amount of time and money aside just for one portion of the WBS. I like to use the example of building the house.

We have $75,000 to spend in the kitchen, but we don’t know exactly what cabinets today. So we have scope, cost and schedule because I have to make a decision by November 1. And then we have planning packages, decisions to be completed and then maybe some issues that we have to resolve by a given date. Also in time management, we did some estimating of duration.

The good news is these that we’re about to look at, not only can you do them for time, you can do them for cost. So saves you some effort. We have analogous estimating. Project a took eight weeks. Project B is a little bigger. So I’m going to say twelve weeks. So you can do that for activities or the whole project. Analogous, estimating parametric estimating is some parameter. So to install light fixture was 2 hours. We have a thousand of those to do so we multiply it across a three point estimate. Remember that this is an average optimistic plus most likely plus pessimistic divided by three.

So it’s just an average. It’s also known as triangular distribution. So there we go. There’s a sample. 25, 45, 75 add those up, divide by 348. 3. A big topic in this chapter was your favorite thing about finding float. We have three types of float. Free float, total float, project float. Project float is the weird one. The whole project would take 30 days to do, but you have a year to actually get it done. Free float is that an activity can be delayed without delaying the early start of any successor activities. Total float is how long can you delay a project without delaying project completion. Here’s a project network diagram. Now, in our course, we saw circles instead of squares, all right? So you might see something like this. In this example, we have let me just get up my marker here because it’s fun to do.

So here we go. Here’s a marker. All right, so these squares, the first square, that represents early start. This one over here represents your early finish. The number in the middle of the square is your duration. The number on top is how much float you’ll receive. And then on the bottom is the name of the note. And then, of course, this is your late start on the backwards, and that’s your late finish on the backwards pass. So you just do it the same way. But you can write your answers in the little square. Don’t let it freak you out if you see that on the exam.

So we have the forward pass and then the backward pass. And then that gives us some idea, gives us an exact idea, I should say, of when the project will end, what’s the earliest it could end, which is also the latest it could end. So we spent a lot of time on float. If you need some more practice on float, I encourage you to go back to chapter six in the pinbox from our course and walk through that again and check it out. Special time management terms that you need to know. Leads and lags. Remember, lead is accelerated time. You bring activities closer together and even overlap. Lag moves activities further apart. Lag is waiting time. It’s positive time.

And then we have schedule compression. We can crash. You add people and cost. Fast tracking is going to add risk and allows phases and activities to overlap. You could do Monte Carlo simulation, and that means you look at every possible combination of events to predict when you could get done. So you could say, well, if these activities are late, what will it do to all of these? Or if all these are early, what opportunities will it create? So you’re just playing what if scenarios with a Monte Carlo simulation. Brings us to the end of our blitz session here on time.

8. Highlight Project Cost Management Details

In this blitz review, we’re going to check out our cost management processes beginning with the cost management plan. We want to take a look at our cost management plan because it really defines what’s our cost estimating and budgeting approach. How will you do cost control? How precise are you going to be and what is your unit of measure? Talking about dollars or yen or euro or even internal dollars? If you’re billing between departments, what are your organizational procedure links? Just a nice way of saying how do you operate?

How do you procure or ask for purchasing or whatever rules you have? Control Thresholds so what’s your range of variance? What happens if you are more than x amount of dollars over budget? How you do performance measurement? Again, EVM, reporting formats and process descriptions, estimating, project cost, you know all about this. Predictions based on current information. Going to look at some cost trade offs and what risk does it introduce. We had our level of accuracy.

Remember the Rom very wild budget a little tighter, definitive the tightest also known as a bottom up and all categories of cost should be estimated. The actual process of creating a cost estimate. Remember Rom negative 25 to plus 75, the budget negative ten to plus 25 and definitive negative five to plus ten. We talked about vendor bid analysis. So this hints at module twelve in the pinbox, but we had those should cost or third party estimates, writing a statement of work, having a bidders conference, vendor selection. So all of that we talk more about in module twelve. But it’s related to cost, obviously. Earned Value Management so this is your favorite chunk of formulas you need to know for the exam. So let’s walk through this.

Probably the most important thing out of this chapter, planned value. So percent of where the project should be. Someone always has to tell you where you are in the project. So when the questions are going to say you are 50% done, but you’re supposed to be 70% done, that’s your plan value, 70%. Earn value is where you are right now. So it’s the percent complete times the budget at completion. Then we have cost variance, schedule variance, CPI, SPI. We know a variance is not good. An index is how well something is performing. Look at these items here in green.

Remember I see these four formulas. It’s actually pretty easy. You’re going to write down EV four times in a row, just like we have here, okay? Then you know if you are dealing with cost, you’re dealing with actual cost. So then cost variance, you put an AC. Cost performance, you put an AC. If you’re dealing with the schedule, you’re dealing with plan value.

So. PV. PV. So what you do is you write down EV four times and then you say it’s a variance. So it’s something minus something, it’s an index. So it’s something divided by something. It’s cost so you write down cost and cost, and then it’s plan value. So you write down TV PV. So it’s just a fast way. There’s four formulas to start off your memorization that you got knocked out. Next up, not so easy. You got to just do a little bit more practice here.

And that’s the estimate at completion. And estimate two, complete estimate at completion. You think about what’s being asked for here. Budget at completion divided by CPI. If you have a CPI of zero point 97, you’re losing $0. 03 on every dollar. So it’s likely you’re going to be over on your final budget. So your estimate at completion is if we continue losing $0. 03 in every dollar, how much more will you be over? So let’s say that our EAC comes out to be $565,000. Estimate to complete is all right. Now your EAC, we’re going to give you 565,000, but you’ve already spent 70,000. How much more do you need to actually finish this project? So it’s our EAC minus actual cost. Then we have our TCPI. There’s two different flavors. The first one is what’s left to do divided by what cash is left. So in other words, are you going to run out of money? So what’s left to do divided by what cash is left. So check this out. We take our budget at completion minus our earned value, what we say we’re worth. All right? The other side is our budget at completion minus the actual cost.

So this is what we’re worth and this is what we’ve actually spent. So we divide those two together. It’s going to show us how likely it is to actually hit the budget at completion. So probably not real great. Now you want to see something interesting here? It’s earned value divided by actual cost. Now, yes, we’re taking BAC minus earn value and BAC minus actual cost. But it’s a lot like the CPI, so you might pay attention to that. Okay, the next one is what’s left to do divided by the predicted amount of cash left.

So this time you’re using EAC to predict how much cash is left. So very similar, but you’re using that prediction. And then the variance at completion is how far are you going to be upside down on this project. So budget at completion minus your EAC, that’s it. I know there’s a lot of formulas there. You just got to do them over, over and over and over. You can do this.