W10_Hilal_Estimating Cost At Completion (Part 3)

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Problem Recognition

In W8 & W9 Blogs, I discussed about using IEACs and Monte Carlo Simulation methods in order to forecast the possible progress for the coming weeks. In this blog, I will use the Best Fit in order to estimate the progress.

Feasible alternative

The Guild of Project Controls Compendium and Reference suggest using three main forecasting/ estimation techniques:
-       Independent estimate at completion (IEAC)
-       Monte Carlo Simulation
-       Best Fit

Analysis of MS Excel Best Fit Alternative

This method will depend on the actual cost of work performed up until week 7 of PMP Course. The table below shows the ACWP 7 weeks of the PMP course project:


Table 1: 7 Weeks ACWP of PMP Course
Now we use three trendlines in order to give us three scenarios:
a.       Linear Regression (Worst Case Scenario)
b.      Polynomial 2nd Order (Most Likely)
c.       Logarithmic Regression (Best Case Scenario)
The three trendlines for the 7 data points and forecast the cost at completion (at Week 13) can be shown below:


Figure 1: Forecast of Cost at Completion of PMP Course using Three Trendlines.

From the Figure above and using PERT formula to calculate the mean and sigma values, we get:


Table 2: Results from Three Trendlines Curve.
The distribution Curve along with probabilities can be shown below:

Figure 2: Distribution curve of the results.
Selection of Preferred Alternative

The preferred alternative will be selected in W11 blog. 

Tracking/ reporting plan

The next step is to compare the three methods to select the most suitable one. Even though I presented three confidence levels, the management should choose the confidence level.

References

Stephen, J. (2017).W11.1_SJP_Forecasts Part 3. Retrieved from https://js-pag-cert-2017.com/w11-1_sjp_forecasts-part-3/

 Guild of Project Controls. (2015). GUILD OF PROJECT CONTROLS COMPENDIUM and REFERENCE (CaR) | Project Controls – planning, scheduling, cost management and forensic analysis (Planning Planet). Retrieved from http://www.planningplanet.com/guild/gpccar/assess-prioritize-and-quantify-risks-opportunities

Zaiontz, C. (2013). Real Statistics Using Excel. Everything you need to do real statistical analysis using Excel. Retrieved from http://www.real-statistics.com/regression/regression-analysis/

Comments

  1. Dr. PDGJanuary 1, 2018 at 3:00 PM

    Same comment as the previous blog..... Your CONTENT is fine but your introduction is not accurately stating your objective in performing these analysis.

    BR,
    Dr. PDG, Jakarta

    ReplyDelete

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