Schedule and Cost Management
What the exam tests
Schedule and cost: dependency logic, critical path and float, compression choices, cost baselines and reserves, and earned value interpretation.
Schedule mechanics
- Precedence diagramming: finish-to-start is most common; start-to-start, finish-to-finish, and start-to-finish also exist.
- The critical path is the longest path through the network; its total float is zero or negative.
- Total float = late start − early start (or late finish − early finish).
- Crashing adds resources and usually cost; fast tracking overlaps phases and usually adds risk. Compress the critical path, not non-critical work.
- Resource leveling can extend the schedule; smoothing uses float and usually does not.
Cost and earned value
Cost baseline = approved time-phased budget excluding management reserve. Contingency reserve covers identified risks; management reserve covers unknown-unknowns above the baseline.
- SV = EV − PV; CV = EV − AC; SPI = EV/PV; CPI = EV/AC.
- EAC = BAC/CPI when current cost performance continues; EAC = AC + (BAC − EV) when remaining work proceeds at the budgeted rate.
- TCPI = (BAC − EV)/(BAC − AC) for the budget target.
Worked example
BAC 200,000; PV 80,000; EV 70,000; AC 90,000. SV = −10,000; CV = −20,000; SPI = 0.875; CPI = 0.778. Interpretation: behind schedule and over budget; each unit of work costs about 1.29 units of budget. EAC = 200,000/0.778 ≈ 257,000. Investigate cost drivers before choosing corrective action or requesting re-baselining.
Traps
- Trusting SPI near project end when most work is complete.
- Using management reserve for a known, identified risk.
- Assuming float belongs to the PM; it belongs to the activity and can be consumed by predecessors.