Question

Earned value cost is difference depending on Structure Depth of DOP.

  • 18 October 2023
  • 1 reply
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Following question was raised to the IFS Support.

The amount of the Purchase Order is 420,000. Progress is calculated to be 25%. However, the DOP amount is 420,000. This is 28.57% progress. Although the amounts are the same, the progress is different. The document says that progress is calculated from the amount of the object.
Why do we get different progress rates even though the object amounts are the same?
The monitoring amounts are different because of the different progress rates.
This is what we initially inquired about. Why are the monitoring amounts different?

 

Following answer was provided by IFS Support for 3 different scenarios.

In "AC1" (Pattern A) the PO is an object that is directly affecting activity progress because it has come from PMRP, and since you have received it 100% progress is reflected for that, and that's an overall weight of 25% of the planned cost for the activity.
In "AC2" (Pattern C), the Misc Demand is handled through the DOP alone so the progress of the DOP such as reserving material at the lower DOP levels would add value to the Misc Demand, as the supply objects progress. Progress or earned value is calculated for each connected object (SO/PO) in the DOP and a weighted value is available in the Misc Demand line.
In "AC3" (Pattern B), you have created the DOP manually, rather than requesting through the Misc Demand. Manually added objects do not add progress to the activity directly. It should happen through the Misc Demand.

 

Relevant screenshots for the scenarios are as follows:

Activity 01

Activity 02

Activity 03

After the explanation following inquiry was made by the customer.

documentation Answer.
For example, in "AC1" (Pattern A) the PO is an object that is directly affecting activity progress because it has come from PMRP, and since you have received it 100% progress is reflected for that, and that's an overall weight of 25% of the planned cost for the activity.
 

However, the manual is as follows.

Shop Order or Purchase Order Line Part (or No Part) created from Project Master Scheduling
---------------------------------------
Earned value is reported from each supply object (SO/PO/MTR). Since there is no direct connection between the forecast demands and the supply objects each supply object will report earned value. The earned value will be summed up on activity level to calculate the activity progress.

 

Since the customer state that there are discrepancies of the given answer with the documentation (https://docs.ifs.com/ifsclouddocs/23r1/default.htm?openpage=https://docs.ifs.com/ifsclouddocs/23r1/ProjectManagement/AboutActivityEVProgressMethods.htm)

Hence please provide explanations on that.


1 reply

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Hi IFS,

>The monitoring amounts are different because of the different progress rates.

The calculation of this progress is not at all clear from the following manual.

(https://docs.ifs.com/ifsclouddocs/23r1/default.htm?openpage=https://docs.ifs.com/ifsclouddocs/23r1/ProjectManagement/AboutActivityEVProgressMethods.htm)

Progress requires an amount and a quantity.
However, the manual does not state where the amounts are to be used.

In this example, "AC1", "AC2" is just a Receipt from a purchase order.
The Receipt has the same quantity and amount for both "AC1" and "AC2".
However, the progress rate has changed.
The amount of money is different, as the quantity never changes.
However, the details of this amount to be obtained are not stated.
Therefore, it cannot be determined whether the calculation of the progress rate is correct.
As a function of monitoring, I am not sure if the percentage of progress is being processed correctly.
We have not been able to prove that the calculation of the rate of progress is not faulty.

The manual needs to state correctly which amount is being obtained.

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