Planning Engineer.net collected for you the top Project Management Definitions that you’ll ever need, here is a list of the definitions with visuals to discuss them.
Project Management: According to the Project Management Body of Knowledge, (PMBOK® Guide), project management is “the application of knowledge, skills, tools, and techniques to project activities to meet the project requirements.”.
It will benefit the reader immensely to have an understanding of the project management definitions before undertaking the more detailed process of project management. I will keep updating this topic to cover all the common definitions in project management. Therefore, if I missed any definition please write it down as a comment and I will update this topic accordingly.
It’s an estimate of how long each activity in the activity list will take. The estimate can be in hours, days, or weeks.
OR it is the process of approximating the number of work periods needed to complete an individual activity with the estimated resources.
Most likely (tM): The duration of the activity, given the resources likely to be assigned, their productivity, realistic expectations of availability for the scheduled activity, dependencies on other participants, and interruptions.
Optimistic (tO): The activity duration is based on a best‐case scenario of what is described in the most likely estimate.
Pessimistic (tP): The activity duration is based on a worst‐case scenario of what is described in the most likely estimate.
It is a significant point or event in the project.
Finish‐to‐Start (FS): The initiation of the successor activity depends upon the completion of the predecessor activity.
Finish‐to‐Finish (FF): The completion of the successor activity depends upon the completion of the predecessor activity.
Start‐to‐Start (SS): The initiation of the successor activity depends upon the initiation of the predecessor activity.
Start‐to‐Finish (SF): The completion of the successor activity depends upon the initiation of the predecessor activity.
A lead allows an acceleration of the successor activity.
A lag directs a delay in the successor activity.
The free float:
The amount of time that a scheduled activity can be delayed without delaying the early start date of any immediate successor activity within the network path.
The total float:
The amount of time that a scheduled activity can be delayed without delaying the project completion date.
The project schedule includes at least a planned start date and planned finish date for each activity.
If resource planning is done at an early stage, then the project schedule would remain preliminary until resource assignments have been confirmed, and scheduled start and finish dates are established.
The project schedule can be presented in summary form, sometimes referred to as the master schedule or milestone schedule, or presented in detail.
A schedule baseline is a specific version of the project schedule developed from the schedule network analysis. It is accepted and approved by the project management team as the schedule baseline with baseline start dates and baseline finish dates.
Budget At Completion (BAC):
This is the first number you think of when you work on your project costs. It’s the total budget that you have for your project—how much you plan to spend on your project.
Planned % Complete:
If the schedule says that your team should have done 400 hours of work so far, and they will work a total of 1,000 hours on the project, then your “Planned % Complete” is 40%.
This is how much of your budget you planned on using so far. If the BAC is $200,000, and the schedule says your Planned % Complete is 40%, then the Planned Value is $200,000 × 40% = $80,000.
Actual % Complete:
Say the schedule says that your team should have done 300 hours of work so far, out of a total of 1,000. But you talk to your team and find out they completed 35% of the work. That means the actual % complete is 35%.
Earned Value (EV):
This figure tells you how much your project earned. Every hour that each team member works adds value to the project. You can figure it out by taking the percentage of the hours that the team has worked and multiplying it by the BAC. If the total cost of the project is $200,000, then the Earned Value is $200,000 × 35% = $70,000.
Schedule Performance Index (SPI):
If you want to know whether you’re ahead of or behind schedule, use SPIs. The key to using this is that when you’re ahead of schedule, you’ve earned more value than planned! So EV will be bigger than PV. To work out your SPI, you just divide your EV by your PV.
Schedule Variance (SV):
It’s easy to see how variance works. The bigger the difference between what you planned and what you earned, the bigger the variance. So, if you want to know how much ahead or behind schedule you are, just subtract PV from EV.
Cost Variance (CV):
This tells you the difference between what you planned on spending and what you spent. So, if you want to know how much under or over budget you are, take AC away from EV.
Earned Value Management (EVM):
Just one of the tools and techniques in the cost control process, When you use these formulas, you’re measuring and analyzing how far off your project is from your plan. Take a look at the formulas one more time (The Earned Value Management formulas):
Note: If the SPI is below 1, then your project is behind schedule. But if you see a CPI under 1, your project is over budget!
Benefit-cost ratio (BCR):
This is the amount of money a project is going to make versus how much it will cost to build it. Generally, if the benefit is higher than the cost, the project is a good investment.
Net present value (NPV):
This is the actual value at a given time of the project minus all of the costs associated with it. This includes the time it takes to build it and labor as well as materials. People calculate this number to see if it’s worth doing a project.
When an organization has to choose between two projects, they are always giving up the money they would have made on the one they don’t do. That’s called opportunity cost. It’s the money you don’t get because you chose not to do a project.
Internal rate of return:
This is the amount of money the project will return to the company that is funding it. It’s how much money a project is making the company. It’s usually expressed as a percentage of the funding that has been allocated to it.
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