## Rules for performance measurement

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rajatahaali
Beginner
Posts: 24
Joined: Thu Mar 30, 2017 9:47 am

### Rules for performance measurement

"One of the rule for Performance measurement is to specify tracking methodologies and the earned value management computation equations for calculating projected estimate at completion (EAC) forecasts to provide a validity check on the bottom-up EAC."

Q1. What does it mean by earned value management computation equation. Does it mean that we have to specify which equations we will use to calculate EAC. Choice of equation varies with circumstances/conditions so how can i preempt the choice of equations for calculation of EAC.

Q2. What does it mean by providing a validity check on the bottom up EAC.
manishpn
Expert
Posts: 2391
Joined: Sat Jan 04, 2014 3:55 pm

### Re: Rules for performance measurement

rajatahaali wrote:"One of the rule for Performance measurement

There are multiple ways a project can measure the completion of work/earned value. Which rules the project will use has to be specified in the project management plan.
for e.g. when do you consider an activity has earned value, it could be x% of earned value when activity has started, x% when its half complete and remaining % when activity is complete. there are other methods like weighted milestone, physical measurement etc. you can consider these as ground rule for measurement.

is to specify tracking methodologies and the earned value management computation equations for calculating projected estimate at completion (EAC) forecasts to provide a validity check on the bottom-up EAC."

Q1. What does it mean by earned value management computation equation.

this simply means which equations will project use to compute earned values not just EAC
Does it mean that we have to specify which equations we will use to calculate EAC. Choice of equation varies with circumstances/conditions so how can i preempt the choice of equations for calculation of EAC.
You do not need to pre empt but specify which formulas will you use in which cases.

Q2. What does it mean by providing a validity check on the bottom up EAC.
read this statement in totality, EVM helps you calculate earned value and also helps you forecast EAC, if the forecast is way off the mark then something is wrong with your original bottom up estimates, the measurements and forecasts helps you get a reality check in the authenticity/correctness of bottom up EAC

For example, if your EAC is continuously going way off the mark of original BAC, then project management plan may specify that if for X weeks on continous basis if project EAC is exceeding 30% from BAC the project will restimate the budget again .
this simply means that

Br,
Manish P
PMP, PMI - ACP, SAFe Agilist
http://www.izenbridge.com/blog/7-effect ... ification/

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