Managing Projects as Investments

209

Glossary

A

ABCP See As Built Critical Path.

AC See Actual Cost.

Acceleration Premium See also Delay Cost. Increase in the value of the

nal product due to earlier completion or delivery date.

Activity-Driven Milestone A milestone representing the start or nish of

an activity or work package. Used on US Department of Defense

programs for proportioning earned value credit.

Actual Cost (AC) The realized cost incurred for the work performed

on an activity during a specic time period. Referred to by the

US Department of Defense as Actual Cost for Work Performed

(ACWP).

ALAP Schedule See As Late As Possible Schedule.

Ancestor All activities that precede another activity on a logical path,

including immediate predecessors, their predecessors, their pre-

decessors’ predecessors, and so on.

As Built Critical Path (ABCP) The actual critical path on the nal sched-

ule representing the completed work as performed. This is the

critical path consisting of work, delays, and constraints that ulti-

mately determines the nal length of the project.

As Late As Possible Schedule (ALAP Schedule) Schedule of activities or

milestones with all oat squeezed out, at their late dates as com-

puted by the backward pass of the critical path algorithm. This

can provide an earned value baseline from which oat distortions

have been removed.

Availability Premium A cost to a project, program, or organization to

guarantee that a specic resource will be available when needed.

This can take the form of overstafng or paying a fee to reserve

the specied resource.

210 Glossary

B

Backward Pass Algorithm See CPM Algorithm.

Basis of Estimates (BOE) Supporting documentation outlining the details

used in establishing project estimates such as assumptions, con-

straints, level of detail, ranges, and condence levels.

Bayesian Probability A probabilistic estimate that is updated as more

relevant data become available.

BCWP See Earned Value.

Beta Distribution A Gaussian distribution of probability used in three-

point estimating and Monte Carlo simulations to predict prob-

abilities of project and activity duration, effort, and cost.

Billable Resources Resources in a contractor organization whose time is

billable to a specic customer.

Black Holes Departments or other functional areas that are so under-

staffed and overworked that not even information, such as esti-

mates, can escape.

Black Swan A metaphor that describes a totally unanticipated event that

has a major impact. Coined by Nassim Nicholas Taleb in his 2007

book of that title, black swans represent a major challenge for

project risk planning.

BOE See Basis of Estimates.

Bottleneck A resource over-allocation during a period of time that makes the

resource unavailable to a project and may delay project completion.

Budget Reserve Also called “cost reserve,” this is additional funding

available to a project to mitigate risk. Budget reserve and sched-

ule reserve are two different types of management reserve, and

are the property of the project manager or the customer/sponsor

to be allotted as they deem appropriate.

Budgeted Cost for Work Performed (BCWP) The term used by the US

Department of Defense for earned value. See Earned Value (EV).

Budgeted Cost for Work Scheduled (BCWS) The term used by the US

Department of Defense for Planned Value (PV).

Burn Rate The rate at which a project or program is spending money per

calendar unit or reporting period.

Burst Point The point in a schedule where one activity precedes two or

more successors.

Business Value The value to an organization, program, or prot that any

work effort is undertaken to generate.

C

CLUB See Cost of Leveling with Unresolved Bottlenecks.

Complex Dependencies Schedule relationships other than simple nish-

to-start (FS). These can include start-to-start (SS), nish-to-nish

(FF), and start-to-nish (SF) relationships, as well as lags.