Earned value management (EVM) - Revision history

Martinarampazzo: /* Absolute indices */

2021-02-28T14:35:28Z

Absolute indices

← Older revision		Revision as of 14:35, 28 February 2021
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	</math>		</math>

	Moreover, if the trend of the BCWS is constant in the interval of time considered, meaning that the same activity is taking place during the entire time, then the schedule variance in time units can also be expressed with the following formula (where BCWS^* is the trend of the curve):		Moreover, if the trend of the BCWS is constant in the interval of time considered, meaning that the same activity is taking place during the entire time, then the schedule variance in time units can also be expressed with the following formula (where BCWS<sup>*</sup> is the trend of the curve):

	:<math>		:<math>

Martinarampazzo: /* Absolute indices */

2021-02-28T14:35:16Z

Absolute indices

← Older revision		Revision as of 14:35, 28 February 2021
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	</math>		</math>

	Moreover, if the trend of the BCWS is constant in the interval of time considered, meaning that the same activity is taking place during the entire time, then the schedule variance in time units can also be expressed with the following formula (where BCWS~~<sup>~~*~~</sup>~~ is the trend of the ~~BCWS~~):		Moreover, if the trend of the BCWS is constant in the interval of time considered, meaning that the same activity is taking place during the entire time, then the schedule variance in time units can also be expressed with the following formula (where BCWS^* is the trend of the curve):

	:<math>		:<math>

Martinarampazzo: /* Absolute indices */

2021-02-28T14:34:41Z

Absolute indices

← Older revision		Revision as of 14:34, 28 February 2021
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	</math>		</math>

	Moreover, if the trend of the BCWS is constant in the interval of time considered, meaning that the same activity is taking place during the entire time, then the schedule variance in time units can also be expressed with the following formula (where BCWS<sup>*<\sup> is the trend of the BCWS):		Moreover, if the trend of the BCWS is constant in the interval of time considered, meaning that the same activity is taking place during the entire time, then the schedule variance in time units can also be expressed with the following formula (where BCWS<sup>*</sup> is the trend of the BCWS):

	:<math>		:<math>

Martinarampazzo: /* Absolute indices */

2021-02-28T14:34:06Z

Absolute indices

← Older revision		Revision as of 14:34, 28 February 2021
Line 116:		Line 116:
	</math>		</math>

	Moreover, if the trend of the BCWS is constant in the interval of time considered, meaning that the same activity is taking place during the entire time, then the schedule variance in time units can also be expressed with the following formula:		Moreover, if the trend of the BCWS is constant in the interval of time considered, meaning that the same activity is taking place during the entire time, then the schedule variance in time units can also be expressed with the following formula (where BCWS<sup>*<\sup> is the trend of the BCWS):

	:<math>		:<math>

Martinarampazzo: /* Practical real life case for schedule variance calculation */

2021-02-28T14:23:41Z

Practical real life case for schedule variance calculation

← Older revision		Revision as of 14:23, 28 February 2021
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	In figure 9 it can be seen that BCWS changes trend from ES to Time Now. Under the hypothesis that ''SV<sub>m</sub> = -110€'', ''BCWS<sub>1</sub> = 60'' and ''BCWS<sub>2</sub> = 30'', applying the simplified formula of section 3.3 returns ''SV<sub>t</sub> = -3.67''. However, looking at the graph it can be seen that it is actually in between -2 and -3. Applying step 1, ''SV''<sub>m</sub> is closest to 0 when adding ''BCWS''<sub>2</sub> and ''BCWS''<sub>1</sub>. This corresponds to ''SV''<sub>t</sub> being smaller than -2. Finally, applying step 2, the decimals are:		In figure 9 it can be seen that BCWS changes trend from ES to Time Now. Under the hypothesis that ''SV<sub>m</sub> = -110€'', ''BCWS<sub>1</sub> = 60'' and ''BCWS<sub>2</sub> = 30'', applying the simplified formula of section 3.3 returns ''SV<sub>t</sub> = -3.67''. However, looking at the graph it can be seen that it is actually in between -2 and -3. Applying step 1, ''SV''<sub>m</sub> is closest to 0 when adding ''BCWS''<sub>2</sub> and ''BCWS''<sub>1</sub>. This corresponds to ''SV''<sub>t</sub> being smaller than -2. Finally, applying step 2, the decimals are:

	:<math>\frac{\left ({\mathrm{SV_m}}+{\mathrm{BCWS_2}}+{\mathrm{BCWS_1}} \right )}{\mathrm{BCWS_1}}=\frac{\mathrm{-110+30+60}}{\mathrm{60}}=\mathrm{-0.33}</math>		:<math>\frac{\left ({\mathrm{SV_m}}+{\mathrm{BCWS_2}}+{\mathrm{BCWS_1}} \right )}{\mathrm{BCWS_1}}=\frac{\mathrm{-110+30+60}}{\mathrm{60}}=\mathrm{-0.34}</math>

	Therefore:		Therefore:

	:<math>\mathrm{SV_t}=\mathrm{-2}+\mathrm{0.33}=\mathrm{-2.33}</math>		:<math>\mathrm{SV_t}=\mathrm{-2}+\mathrm{0.34}=\mathrm{-2.34}</math>

	This approach is effective as it provides an accurate value for ''SV''<sub>t</sub> when the trend of the BCWS is not constant, however it may be challenging to implement for large projects where changes in the trend of the BCWS occur often.		This approach is effective as it provides an accurate value for ''SV''<sub>t</sub> when the trend of the BCWS is not constant, however it may be challenging to implement for large projects where changes in the trend of the BCWS occur often.

Martinarampazzo: /* Practical real life case for schedule variance calculation */

2021-02-28T14:23:11Z

Practical real life case for schedule variance calculation

← Older revision		Revision as of 14:23, 28 February 2021
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	An example is presented to better understand this process.		An example is presented to better understand this process.

	In figure 9 it can be seen that BCWS changes trend from ES to Time Now. Under the hypothesis that ''SV<sub>m</sub> = -110€'', ''BCWS<sub>1</sub> = 60'' and ''BCWS<sub>2</sub> = 30'', applying the simplified formula of section 3.3 returns ''SV<sub>t</sub> = -3.67''. However, looking at the graph it can be seen that it is actually in between -2 and -3. Applying step 1, ''SV''<sub>m</sub> is closest to 0 when adding ''BCWS''<sub>2</sub> and ''BCWS''<sub>1</sub>. This corresponds to ''SV''<sub>t</sub> being ~~greater~~ than -2. Finally, applying step 2, the decimals are:		In figure 9 it can be seen that BCWS changes trend from ES to Time Now. Under the hypothesis that ''SV<sub>m</sub> = -110€'', ''BCWS<sub>1</sub> = 60'' and ''BCWS<sub>2</sub> = 30'', applying the simplified formula of section 3.3 returns ''SV<sub>t</sub> = -3.67''. However, looking at the graph it can be seen that it is actually in between -2 and -3. Applying step 1, ''SV''<sub>m</sub> is closest to 0 when adding ''BCWS''<sub>2</sub> and ''BCWS''<sub>1</sub>. This corresponds to ''SV''<sub>t</sub> being smaller than -2. Finally, applying step 2, the decimals are:

	:<math>\frac{\left ({\mathrm{SV_m}}+{\mathrm{BCWS_2}}+{\mathrm{BCWS_1}} \right )}{\mathrm{BCWS_1}}=\frac{\mathrm{-110+30+60}}{\mathrm{60}}=\mathrm{-0.33}</math>		:<math>\frac{\left ({\mathrm{SV_m}}+{\mathrm{BCWS_2}}+{\mathrm{BCWS_1}} \right )}{\mathrm{BCWS_1}}=\frac{\mathrm{-110+30+60}}{\mathrm{60}}=\mathrm{-0.33}</math>

Martinarampazzo: /* Practical real life case for schedule variance calculation */

2021-02-28T14:22:27Z

Practical real life case for schedule variance calculation

← Older revision		Revision as of 14:22, 28 February 2021
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	An example is presented to better understand this process.		An example is presented to better understand this process.

	In figure 9 it can be seen that BCWS changes trend from ES to Time Now. Under the hypothesis that ''SV<sub>m</sub> = -110€'', ''BCWS<sub>1</sub> = 60'' and ''BCWS<sub>2</sub> = 30'', applying the simplified formula of section 3.3 returns ''SV<sub>t</sub> = -3.66''. However, looking at the graph it can be seen that it is actually in between -2 and -3. Applying step 1, ''SV''<sub>m</sub> is closest to 0 when adding ''BCWS''<sub>2</sub> and ''BCWS''<sub>1</sub>. This corresponds to ''SV''<sub>t</sub> being greater than -2. Finally, applying step 2, the decimals are:		In figure 9 it can be seen that BCWS changes trend from ES to Time Now. Under the hypothesis that ''SV<sub>m</sub> = -110€'', ''BCWS<sub>1</sub> = 60'' and ''BCWS<sub>2</sub> = 30'', applying the simplified formula of section 3.3 returns ''SV<sub>t</sub> = -3.67''. However, looking at the graph it can be seen that it is actually in between -2 and -3. Applying step 1, ''SV''<sub>m</sub> is closest to 0 when adding ''BCWS''<sub>2</sub> and ''BCWS''<sub>1</sub>. This corresponds to ''SV''<sub>t</sub> being greater than -2. Finally, applying step 2, the decimals are:

	:<math>\frac{\left ({\mathrm{SV_m}}+{\mathrm{BCWS_2}}+{\mathrm{BCWS_1}} \right )}{\mathrm{BCWS_1}}=\frac{\mathrm{-110+30+60}}{\mathrm{60}}=\mathrm{-0.33}</math>		:<math>\frac{\left ({\mathrm{SV_m}}+{\mathrm{BCWS_2}}+{\mathrm{BCWS_1}} \right )}{\mathrm{BCWS_1}}=\frac{\mathrm{-110+30+60}}{\mathrm{60}}=\mathrm{-0.33}</math>

Martinarampazzo: /* Practical real life case for schedule variance calculation */

2021-02-28T14:21:39Z

Practical real life case for schedule variance calculation

← Older revision		Revision as of 14:21, 28 February 2021
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	== Practical real life case for schedule variance calculation ==		== Practical real life case for schedule variance calculation ==
	[[File:~~Special Case~~.png\|400px\|thumb\|Figure 9: Example of practical case for Schedule Variance calculation (own figure, created based on <ref name="PoliSV"> Pozzi A. Department of Management, Economics and Industrial Engineering, Politecnico di Milano. (2020). ''Sistemi Organizzativi: SV<sub>tempo</sub> - Modalità di calcolo''. Class lecture.</ref>)]]		[[File:Special_2.png\|400px\|thumb\|Figure 9: Example of practical case for Schedule Variance calculation (own figure, created based on <ref name="PoliSV"> Pozzi A. Department of Management, Economics and Industrial Engineering, Politecnico di Milano. (2020). ''Sistemi Organizzativi: SV<sub>tempo</sub> - Modalità di calcolo''. Class lecture.</ref>)]]

	During the monitoring of projects, often real life situations are not as expected from a theoretical point of view. In section 3.3 schedule variance expressed in time units was discussed, under the circumstances that BCWS curve does not change trend in the considered period of time. The formula to calculate it is:		During the monitoring of projects, often real life situations are not as expected from a theoretical point of view. In section 3.3 schedule variance expressed in time units was discussed, under the circumstances that BCWS curve does not change trend in the considered period of time. The formula to calculate it is:
Line 357:		Line 357:
	An example is presented to better understand this process.		An example is presented to better understand this process.

	In figure 9 it can be seen that BCWS changes trend from ES to Time Now. Under the hypothesis that ''SV<sub>m</sub> = -~~20€~~'', ''BCWS<sub>1</sub> = ~~60€~~'' and ''BCWS<sub>2</sub> = ~~30€~~'', applying the simplified formula of section 3.3 returns ''SV<sub>t</sub> = -0.66''. However, looking at the graph it can be seen that it is actually in between -1 and -2. Applying step 1, ''SV''<sub>m</sub> is closest to 0 when adding ''BCWS''<sub>2</sub> ~~once~~. This corresponds to ''SV''<sub>t</sub> being ~~in between -1 and~~ -2. Finally, applying step 2, the decimals are:		In figure 9 it can be seen that BCWS changes trend from ES to Time Now. Under the hypothesis that ''SV<sub>m</sub> = -110€'', ''BCWS<sub>1</sub> = 60'' and ''BCWS<sub>2</sub> = 30'', applying the simplified formula of section 3.3 returns ''SV<sub>t</sub> = -3.66''. However, looking at the graph it can be seen that it is actually in between -2 and -3. Applying step 1, ''SV''<sub>m</sub> is closest to 0 when adding ''BCWS''<sub>2</sub> and ''BCWS''<sub>1</sub>. This corresponds to ''SV''<sub>t</sub> being greater than -2. Finally, applying step 2, the decimals are:

	:<math>\frac{\left ({\mathrm{SV_m}}+{\mathrm{BCWS_2}} \right )}{\mathrm{BCWS_1}}=\frac{\mathrm{-20+30}}{\mathrm{60}}=\mathrm{0.17}</math>		:<math>\frac{\left ({\mathrm{SV_m}}+{\mathrm{BCWS_2}}+{\mathrm{BCWS_1}} \right )}{\mathrm{BCWS_1}}=\frac{\mathrm{-110+30+60}}{\mathrm{60}}=\mathrm{-0.33}</math>

	Therefore:		Therefore:

	:<math>\mathrm{SV_t}=\mathrm{-2}+\mathrm{0.17}=\mathrm{-1.83}</math>		:<math>\mathrm{SV_t}=\mathrm{-2}+\mathrm{0.33}=\mathrm{-2.33}</math>

	This approach is effective as it provides an accurate value for ''SV''<sub>t</sub> when the trend of the BCWS is not constant, however it may be challenging to implement for large projects where changes in the trend of the BCWS occur often.		This approach is effective as it provides an accurate value for ''SV''<sub>t</sub> when the trend of the BCWS is not constant, however it may be challenging to implement for large projects where changes in the trend of the BCWS occur often.

Martinarampazzo: /* Limitations */

2021-02-28T14:03:39Z

Limitations

← Older revision		Revision as of 14:03, 28 February 2021
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	*First of all, the calculation of the POC and thus the BCWP curve is a challenging part of EVM as there is a wide range of methods which can be used, as discussed in section 4 of this article. Project managers have to evaluate the trade-off between the inaccuracy of subjective methods and the demanding calculations required by discrete methods. Moreover, the choice of the tool for the BCWP calculation is not a controlling but a planning activity and therefore, when planning each activity, it is important to define also what is the best way to control it <ref name="Hayes">Hayes, R. (2001). ''Analysis and application of earned value management to the Naval Construction Force''. California, USA: Naval Postgraduate School (U.S.). Dudley Knox Library</ref>. Another aspect is that being that POC and BCWP are often approximated values, all the following indices calculated may be imprecise and thus should always be interpreted according to the context of the project.		*First of all, the calculation of the POC and thus the BCWP curve is a challenging part of EVM as there is a wide range of methods which can be used, as discussed in section 4 of this article. Project managers have to evaluate the trade-off between the inaccuracy of subjective methods and the demanding calculations required by discrete methods. Moreover, the choice of the tool for the BCWP calculation is not a controlling but a planning activity and therefore, when planning each activity, it is important to define also what is the best way to control it <ref name="Hayes">Hayes, R. (2001). ''Analysis and application of earned value management to the Naval Construction Force''. California, USA: Naval Postgraduate School (U.S.). Dudley Knox Library</ref>. Another aspect is that being that POC and BCWP are often approximated values, all the following indices calculated may be imprecise and thus should always be interpreted according to the context of the project.

	Another problematic aspect concerns the application of formulas for WBEs at the initial stages of completion. Looking at EAC formula in section 3.4, the less work is done, the more BCWP will vary from BAC and EAC will diverge from ACWP, the actual work performed. This suggests that forecasting should be carried out with caution especially in the initial phases of the project, as small variations in SPI and CPI indices from 1, can lead to huge variations in the time and cost of the activities, which often do not correspond to reality. An example from the book ''L'organizzazione dell'impresa'' by Bartezzaghi Emilio will be taken into consideration. The first assumption is that there are two WBEs, one which is in the early stage (lower than 20% of completion) and another one in the final phases. The second assumption is that these two activities are on time and have the same negative cost variance. According to the formulas, ''CPI''<sub>1</sub> is smaller than ''CPI''<sub>2</sub> because ''WBE''<sub>1</sub> has just begun. According to the same logic, ''EAC''<sub>1</sub> is greater than ''EAC''<sub>2</sub> (scenario 2 of forecasting). This suggests that ''WBE''<sub>2</sub> is performing better than ''WBE''<sub>1</sub>. However, when calculating the TCPI, ''WBE''<sub>2</sub> should increase its performance tremendously compared to ''WBE''<sub>2</sub> in order to finish the project with the planned total budget. This is due to the fact that ''WBE''<sub>2</sub> is nearly finished and therefore it has less time to make up for the cost deviations. For this reason, project managers should impose a limit of variation of esteems of +/- 10% if the activity is already stable, so usually for ''BCWP=20%BAC'' <ref name="SO">Bartezzaghi, E. (2019). ''L'organizzazione dell'impresa''. 4th ed. Milano: Rizzoli ETAS</ref>.		Another problematic aspect concerns the application of formulas for WBEs at the initial stages of completion. Looking at EAC formula in section 3.4, the less work is done, the more BCWP will vary from BAC and EAC will diverge from ACWP, the actual work performed. This suggests that forecasting should be carried out with caution especially in the initial phases of the project, as small variations in SPI and CPI indices from 1, can lead to huge variations in the time and cost of the activities, which often do not correspond to reality. An example from the book ''L'organizzazione dell'impresa'' by Bartezzaghi Emilio will be taken into consideration. The first assumption is that there are two WBEs, one which is in the early stage (lower than 20% of completion) and another one in the final phases. The second assumption is that these two activities are on time and have the same negative cost variance. According to the formulas, ''CPI''<sub>1</sub> is smaller than ''CPI''<sub>2</sub> because ''WBE''<sub>1</sub> has just begun. According to the same logic, ''EAC''<sub>1</sub> is greater than ''EAC''<sub>2</sub> (scenario 2 of forecasting). This suggests that ''WBE''<sub>2</sub> is performing better than ''WBE''<sub>1</sub>. However, when calculating the TCPI, ''WBE''<sub>2</sub> should increase its performance tremendously compared to ''WBE''<sub>1</sub> in order to finish the project with the planned total budget. This is due to the fact that ''WBE''<sub>2</sub> is nearly finished and therefore it has less time to make up for the cost deviations. For this reason, project managers should impose a limit of variation of esteems of +/- 10% if the activity is already stable, so usually for ''BCWP=20%BAC'' <ref name="SO">Bartezzaghi, E. (2019). ''L'organizzazione dell'impresa''. 4th ed. Milano: Rizzoli ETAS</ref>.

	*Another limitation to EVM with regards to forecasting is that there is always some degree of uncertainty on the different parameters that characterize a project. These parameters include the “activity durations or costs, resource use, the presence of precedence relations or even on the existence of an activity in the project network” (Vanhoucke M., 2016, ''Integrated Project Management Sourcebook'', p. 237). This makes forecasting in EVM a critical step that project managers have to approach carefully. A suggested solution proposed by Vanhoucke M. is for project managers to visualize the future trend of these parameters not as a point, but as a dataset, and therefore as a probability distribution. In this way, it is possible to apply simulation models that imitate the progress of parameters and to understand the overall future trend of the project. More on this can be read in the article ''RA4: Activity distributions'', p. 119 <ref name="graphs"> Vanhoucke, M. (2016). ''Integrated Project Management Sourcebook''. Gent, Belgium: Springer</ref>.		*Another limitation to EVM with regards to forecasting is that there is always some degree of uncertainty on the different parameters that characterize a project. These parameters include the “activity durations or costs, resource use, the presence of precedence relations or even on the existence of an activity in the project network” (Vanhoucke M., 2016, ''Integrated Project Management Sourcebook'', p. 237). This makes forecasting in EVM a critical step that project managers have to approach carefully. A suggested solution proposed by Vanhoucke M. is for project managers to visualize the future trend of these parameters not as a point, but as a dataset, and therefore as a probability distribution. In this way, it is possible to apply simulation models that imitate the progress of parameters and to understand the overall future trend of the project. More on this can be read in the article ''RA4: Activity distributions'', p. 119 <ref name="graphs"> Vanhoucke, M. (2016). ''Integrated Project Management Sourcebook''. Gent, Belgium: Springer</ref>.

Martinarampazzo: /* Limitations */

2021-02-28T14:02:02Z

Limitations

← Older revision		Revision as of 14:02, 28 February 2021
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	The following section includes limitations of EVM, as discussed in a variety of articles and books.		The following section includes limitations of EVM, as discussed in a variety of articles and books.

	*First of all, the calculation of the POC and thus the BCWP curve is a challenging part of EVM as there is a wide range of methods which can be used, as discussed in section 4 of this article. Project managers have to evaluate the trade-off between the inaccuracy of subjective methods and the demanding calculations required by discrete methods. Moreover, the choice of the tool for the BCWP calculation is not a controlling but a planning activity and therefore, when planning each activity, it is important to define also what is the best way to control it <ref name="Hayes">Hayes, R. (2001). ''Analysis and application of earned value management to the Naval Construction Force''. California, USA: Naval Postgraduate School (U.S.). Dudley Knox Library</ref>. Another aspect is that being that POC and BCWP often ~~are~~ approximated values, all the following indices calculated may be imprecise and thus should always be interpreted according to the context of the project.		*First of all, the calculation of the POC and thus the BCWP curve is a challenging part of EVM as there is a wide range of methods which can be used, as discussed in section 4 of this article. Project managers have to evaluate the trade-off between the inaccuracy of subjective methods and the demanding calculations required by discrete methods. Moreover, the choice of the tool for the BCWP calculation is not a controlling but a planning activity and therefore, when planning each activity, it is important to define also what is the best way to control it <ref name="Hayes">Hayes, R. (2001). ''Analysis and application of earned value management to the Naval Construction Force''. California, USA: Naval Postgraduate School (U.S.). Dudley Knox Library</ref>. Another aspect is that being that POC and BCWP are often approximated values, all the following indices calculated may be imprecise and thus should always be interpreted according to the context of the project.

	*In the forecasting part of EVM, it may also be challenging to understand which type of issue the activity or project is facing and therefore which of three set of formulas to utilize. This is where the experience and knowledge of project managers helps face this challenge.

	Another problematic aspect concerns the application of formulas for WBEs at the initial stages of completion. Looking at EAC formula in section 3.4, the less work is done, the more BCWP will vary from BAC and EAC will diverge from ACWP, the actual work performed. This suggests that forecasting should be carried out with caution especially in the initial phases of the project, as small variations in SPI and CPI indices from 1, can lead to huge variations in the time and cost of the activities, which often do not correspond to reality. An example from the book ''L'organizzazione dell'impresa'' by Bartezzaghi Emilio will be taken into consideration. The first assumption is that there are two WBEs, one which is in the early stage (lower than 20% of completion) and another one in the final phases. The second assumption is that these two activities are on time and have the same negative cost variance. According to the formulas, ''CPI''<sub>1</sub> is smaller than ''CPI''<sub>2</sub> because ''WBE''<sub>1</sub> has just begun. According to the same logic, ''EAC''<sub>1</sub> is greater than ''EAC''<sub>2</sub> (scenario 2 of forecasting). This suggests that ''WBE''<sub>2</sub> is performing better than ''WBE''<sub>1</sub>. However, when calculating the TCPI, ''WBE''<sub>2</sub> should increase its performance tremendously compared to ''WBE''<sub>2</sub> in order to finish the project with the planned total budget. This is due to the fact that ''WBE''<sub>2</sub> is nearly finished and therefore it has less time to make up for the cost deviations. For this reason, project managers should impose a limit of variation of esteems of +/- 10% if the activity is already stable, so usually for ''BCWP=20%BAC'' <ref name="SO">Bartezzaghi, E. (2019). ''L'organizzazione dell'impresa''. 4th ed. Milano: Rizzoli ETAS</ref>.		Another problematic aspect concerns the application of formulas for WBEs at the initial stages of completion. Looking at EAC formula in section 3.4, the less work is done, the more BCWP will vary from BAC and EAC will diverge from ACWP, the actual work performed. This suggests that forecasting should be carried out with caution especially in the initial phases of the project, as small variations in SPI and CPI indices from 1, can lead to huge variations in the time and cost of the activities, which often do not correspond to reality. An example from the book ''L'organizzazione dell'impresa'' by Bartezzaghi Emilio will be taken into consideration. The first assumption is that there are two WBEs, one which is in the early stage (lower than 20% of completion) and another one in the final phases. The second assumption is that these two activities are on time and have the same negative cost variance. According to the formulas, ''CPI''<sub>1</sub> is smaller than ''CPI''<sub>2</sub> because ''WBE''<sub>1</sub> has just begun. According to the same logic, ''EAC''<sub>1</sub> is greater than ''EAC''<sub>2</sub> (scenario 2 of forecasting). This suggests that ''WBE''<sub>2</sub> is performing better than ''WBE''<sub>1</sub>. However, when calculating the TCPI, ''WBE''<sub>2</sub> should increase its performance tremendously compared to ''WBE''<sub>2</sub> in order to finish the project with the planned total budget. This is due to the fact that ''WBE''<sub>2</sub> is nearly finished and therefore it has less time to make up for the cost deviations. For this reason, project managers should impose a limit of variation of esteems of +/- 10% if the activity is already stable, so usually for ''BCWP=20%BAC'' <ref name="SO">Bartezzaghi, E. (2019). ''L'organizzazione dell'impresa''. 4th ed. Milano: Rizzoli ETAS</ref>.