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Topics: Cost Management, Earned Value Management, Scope Management
What's the financial influence on the budget when the Banana Effect occurs on the S curve of the project's progress activities?
Network:520



During the monitoring of the project's progress by the S curve, the occurrence of the Banana Effect was identified (effect caused when during a given period a great effort in the execution of the activities that elevates the general progress of the project in relation to the planned estimate of the S curve).
The question is how much does this influence (positively or negatively) the Earned Value Analysis (EVA) in relation to the Estimate to Complete (ETC), specifically on budgets with low-variation scope projects?
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Network:277



Cleber,
ETC= Estimate at Completion – Actual Cost

Estimate to Complete is the remaining work. If there is little change to the scope, then the total amount of work remains (EAC) relatively constant provided that the CPI (efficiency) remains constant. A period of great effort is an increase in AC, so if EAC is constant and AC goes up, then ETC should go gown by the amount of work completed during the burst of effort.

Often there is some efficiency change (CPI) during high efforts such as overtime charging would make efficiency go down (more cost per hour worked), or the fact you have a dedicated team working on the project, efficiency may go up.
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1 reply by Cleber Guerreiro
Apr 30, 2019 10:23 AM
Cleber Guerreiro
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Excellent explanation Keith, i agree when you mention that the AC increases cause of the high effort in the activities (considering low variation in scope and constant EAC).

In the project that I managed, at one point there was a great effort that increased the S curve in relation to the planned one, and when I analyzed the efficiency (CPI and SPI), both did not have great variation. However, an important detail to note was that the variation indicators (CV and SV) had a great oscillation in the same period but didn't affect the KPI's main.

Thank you for your point of view and technical collaboration
Network:22078



I agree with Keith. However, some other conditions may exist. First, check the whole calculation process and all input resources. Then, look for any significant changes in execution or reporting as well as planning.
Network:520



Apr 29, 2019 1:14 PM
Replying to Keith Novak
...
Cleber,
ETC= Estimate at Completion – Actual Cost

Estimate to Complete is the remaining work. If there is little change to the scope, then the total amount of work remains (EAC) relatively constant provided that the CPI (efficiency) remains constant. A period of great effort is an increase in AC, so if EAC is constant and AC goes up, then ETC should go gown by the amount of work completed during the burst of effort.

Often there is some efficiency change (CPI) during high efforts such as overtime charging would make efficiency go down (more cost per hour worked), or the fact you have a dedicated team working on the project, efficiency may go up.
Excellent explanation Keith, i agree when you mention that the AC increases cause of the high effort in the activities (considering low variation in scope and constant EAC).

In the project that I managed, at one point there was a great effort that increased the S curve in relation to the planned one, and when I analyzed the efficiency (CPI and SPI), both did not have great variation. However, an important detail to note was that the variation indicators (CV and SV) had a great oscillation in the same period but didn't affect the KPI's main.

Thank you for your point of view and technical collaboration

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