Slides 11 4 apply earned value management principles to corp

• Standard: with at least 80% accuracy • Identify key variables from case study data • Calculate BAC, schedule and cost variances, and EAC... Building the Great Pyramid Case A: The Air F

Apply Earned Value Management

Principles to Case Study Scenario:

Completing the Great Pyramid

If Only the Pharaoh Had

the Corps of Engineers

Terminal Learning Objective

• Task: Apply Earned Value Management Principles

to Case Study Scenario

• Condition: You are training to become an ACE

with access to ICAM course handouts, readings, and spreadsheet tools and awareness of

Operational Environment (OE)/Contemporary

Operational Environment (COE) variables and

actors.

• Standard: with at least 80% accuracy

• Identify key variables from case study data

• Calculate BAC, schedule and cost variances, and EAC

Building the Great Pyramid Case A: The Air Force Approach

• Read the paper “If the Pharaoh Had Only Used an

Earned Value System in Building the Pyramids”

• By LTC Neimann (USAF Ret) found at

https://acc.dau.mil/CommunityBrowser.aspx?id=19572

• Using the tools learned:

• Build and verify the BAC presented in the paper

• Determine schedule variance at Year 12

• Determine the cost variance at Year 12

• Calculate EAC at Year 12

Budget at Completion: BAC

Year Design Mfg Comp Test Assemble Intg Test Total Cum

Schedule and Cost Variances:

Design at Year 12

BCWS Schedule Variance BCWP Variance Cost ACWP

Schedule and Cost Variances:

Manufacture at Year 12

BCWS Schedule Variance BCWP Variance Cost ACWP

Schedule and Cost Variances:

Component Test at Year 12

BCWS Schedule Variance BCWP Variance Cost ACWP

Year 12 Results

• We are now behind schedule and over cost: terrible!!

• ACWP is 130% of BCWP so EAC can be projected at 130% of BAC: (1.30)20M = 26M

BCWS Schedule Variance BCWP Variance Cost ACWP

Building the Great Pyramid Case B: Corps of Engineers

• The Pharaoh was quite displeased with the Air Force Pyramid Building Project’s AAR results

• LTC Neimann was re-assigned to flying carpets and

moved to a lovely tent in the Sinai where he soon retired

• The Pharaoh turned to the Corps of Engineers

• He asked for project proposals to complete the Great

Pyramid within four years

• The Corps of Engineers tasked six teams to make

proposals to complete an enhanced, Army-ized Army-ized pyramid

The U.S Army Corps of Engineers

www.usace.army.mil/services

• Is the Nation’s number one federal provider of outdoor recreation

• Owns and operates more than 600 dams

• Operates and maintains 12,000 miles of commercial inland navigation channels

• Dredges more than 200 million cubic yards of construction and maintenance dredge material annually

• Maintains 926 coastal, Great Lakes and inland harbors

• Restores, creates, enhances or preserves tens of thousands of acres of wetlands

annually under the Corps’ Regulatory Program

• Provides a total water supply storage capacity of 329.2 million acre-feet in major

Team Design Options:

Pick Two from Left and Three from Right

Take advantage of Corps’ Core

Competencies

• Add a dam and lake to

provide recreational venue

for tourists and pilgrims

• Divert the Nile River to ease

transportation to site

• Build levees around pyramid

to eliminate any flooding

threat

• Build barracks facilities for

workers and guests

• Up to one more of your

Task 1: Build Your BAC

• Build your work breakdown structure given your

choices from the previous page

• Assume each task takes two years

• Don’t ignore need for more blocks and the assembly task

• You should have seven tasks (blocks, assembly, two corps’

core competency, and three Army-ize)

• Estimate cost for each task for years 1, 2, 3, 4 (in year

3000 BC shekels)

• Present your design, work schedule and graph of BCWS

to the class

• Make sure you don’t exceed the $13M the Air Force had

estimated for added cost to completion

Budgeted Cost of Work Scheduled:

Fill in the Blanks

Graph of Pyramid Completion Project

Team Proposal Presentations

Task 2: AAR for the Pharaoh

• Generate actual cost and schedule per following page’s instructions

• Present to class

• Cost and schedule variances for each year until

completion (4+ slides)

• BAC and EAC for the first year (1 slide)

• Graph of BCWS, BCWP, ACWP (1 slide)

• A reconciliation of your variance results at completion (1

slide)

• Suggestions for continuous improvement (1 slide)

• A view of what your finished pyramid looks like (1 slide)

Task 2: Developing Actual

Cost and Schedule

• Use the randbetween formula in Excel to generate a random number between 1 and 10 for each task:

Task 2: Reality Hits

1 Freak rain storms wash out a year’s progress: add year at same cost

2 Assyrians attack but are easily defeated: however, add 20% to task cost

3 Engineering error: task takes a third year at same average cost per year

4 Outsourcing accelerates progress, raises 1st year cost 50% but completes task

5 Slaves rebel: add 50% to task cost

6 Conquests add slaves to workforce: cut task cost 30% & finish one year early

7 Dust storms disrupt work: add 20% to task cost

8 Hidden Air Force funds discovered: reduce task cost 50%

9 LSS improves process: eliminate 2nd year and its cost

10 Finance Corps ACES assigned to project: reduce cost of all tasks 10%

Team AAR Presentations

Teacher’s Notes: Example

Teacher’s Notes: Actual Costs

2 20% more cost assemble 540 540 1080 1755

1010% less all tasks divert nile 900 900 1800 3555

3 add yr at same cost dam and lake 1800 900 1350 4050 7605

2 20% more cost camo 2160 1080 3240 10845

total 1215 3465 4635 2880 12195

Teacher’s Notes: Example

bcws schedule variance bcwp variance cost acwp

cost at point in time 500 500 1000 325 675

cost at point in time 500 0 500 (40) 540

year 1 total 1000 500 1500 285 1215

acwp/bcwp 81%

Teacher’s Notes: 2 nd Year Results

Teacher’s Notes: 3 rd Year Results

bcws variance bcwp variance acwp

Graphing the Pyramid Project

ACWP BCWS

BCWP

Graphing the Pyramid Project

ACWP BCWS

BCWP

Army audit agency discovered hidden Air Force funds 1500

Block outsourcing continuous improvement 250

Teacher’s Notes:

Continuous Improvement Suggestions

• Get more ACES and involve them more

• Check Engineering designs before they create major cost overruns

• Double check Engineering designs

• Look for more outsourcing opportunities

Camouflaged Pyramid on Lake:

Excellent Camouflage, Isn’t It?!