Updating the schedule: Setting actual and remaining cost values of activities in progress

One of the primary tasks during project control is periodically updating the baseline schedule to reflect the actual progress of the work done and to present a realistic forecast of the remaining work. Measuring the progress of a project can be done in various ways. The two most well-known and widely used techniques are:

• Earned Value Management (EVM): In this technique, the schedule predictions using the performance metrics available in EVM completely rely on estimates about the percentage completion of the activities and give a helicopter view on the performance of the project at the current status day. This technique is outside the scope of this article. Further references can be found in the “Earned Value Management: An overview” article.
• Critical Path Method (CPM): A more time-consuming and detailed alternative is to update the baseline Gantt chart at the activity level, which is often constructed using CPM techniques (or its extensions). In this so-called tracking Gantt chart, the schedule prediction is made by taking the actual and estimated remaining durations of each activity into account and by updating the Gantt chart. In doing so, the tracking Gantt chart gives a prediction of the future schedule based on the inputs of actual and remaining durations/costs of activities.

• Baseline schedule: Construct the baseline schedule to get the planned duration and budget at completion.
• Schedule update: Set the actual start, actual and remaining duration and actual and remaining cost values to  update the schedule.
• Two remarks: Explain the difference between EVM and CPM schedule control and see whether the inclusion of resource costs will change the general approach discussed in this article.

• Activity 1:
  • Planned duration = 15 days
  • Fixed cost = € 1,000
  • Variable cost = € 50 per day
• Activity 2:
  • Planned duration = 20 days
  • Fixed cost = € 2,000
  • Variable cost = € 50 per day

• Activity 1: 1,000 + 15 * € 50 = € 1,750
• Activity 2: 2,000 + 20 * € 50 = € 3,000

• Actual Start: Actual starting time of an activity on or before the status date which might differ from the original baseline start time. 

• Actual Duration (AD): The time spent on an activity between its actual start time and the current status date. It represents the workload already spent on this activity until now (i.e. day 8).
• Remaining Duration (RD): A forecast of how many time units (hours, days, weeks, years) an activity will need from the status date forward to finish its remaining work.

• Actual Cost (AC): The actual cost for the work already done. Ideally, this actual cost should have a clear relation with the workload already done by the various resources assigned to this activity. It can be done based on time sheets for the various resources or based on knowledge about the actual spendings already made for the portion of work done for the activity. Since updating the resource time sheets to get the actual cost of an activity in progress can be a time-consuming task, a simple and effective alternative way to estimate the actual cost of an activity in progress can be done using the following formula:

• Planned Actual Cost (PAC): The planned actual cost is calculated based on the baseline schedule information and is equal to the total planned activity cost given by the baseline schedule when the activity is in progress for AD time units. Consequently, the actual duration estimate to estimate the total workload spent on an activity in progress determines the planned actual cost for this activity. It is assumed that all costs are as planned and also the resources work as planned. For more information about calculating the total activity cost, see the “The cost of a project activity: Calculating the activity and/or resource costs” article.
• Planned Actual Cost Deviation (PACDev): Since uncertainty typifies projects or resources shift from time to time and work more or less efficient than originally planned, the actual cost of an activity in progress can differ from the planned actual cost. Consequently, the planned actual cost deviation is a way to express that difference, and hence, positive or negative values can be set to denote that the actual cost of an activity in progress is higher or lower than the planned actual cost. This PACDev replaces the various time sheets of resources.

• Remaining Cost (RC): A forecast of how many additional monetary resources (euro, dollars, ...) an activity requires to finish the portion of remaining work. Similar to the actual cost estimate, the remaining cost estimate can be determined in the following way:

• Planned Remaining Cost (PRC): The planned remaining cost is, similar to the planned actual cost, calculated automatically based on the remaining duration (RD) input. 
• Planned Remaining Cost Deviation (PRCDev): In order to give a realistic estimate of the remaining cost, the planned remaining cost value can be modified using the optional planned remaining cost deviation field.