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Level: Advanced
TCM Section(s):
9.2. Progress and Performance Measurement
7.2. Schedule Planning and Development
Venue: 2021 AACE International Conference & Expo
Abstract: The earned value metric schedule performance index (SPI) has limitations in describing a project’s schedule performance and variances. A new research study conducted by Construction Industry Institute (CII) has suggested augmenting SPI with a new way of evaluating and assessing performance.
Schedule beta(β) originates from stock performance index in finance and has a potential to become a new standard of measuring performance and quantifying systematic and specific risk in a project’s duration-based metrics.
This technical paper will demonstrate a mathematical formulation and will exhibit the practicality of applying schedule beta to determine a project’s duration-based risk or opportunity. A brief introduction, and highlights of the original theory of capital asset pricing model (CAPM) developed in the sixties by Sharp, Lintner and Black, and Fischer, Jensen and Scholes will be presented. The theory will then be customized and applied to a sample project for the purpose of investigating that project’s risks and measuring its performance versus other projects in a portfolio.
Level: Advanced
TCM Section(s):
9.2. Progress and Performance Measurement
7.2. Schedule Planning and Development
Venue: 2021 AACE International Conference & Expo
Abstract: The earned value metric schedule performance index (SPI) has limitations in describing a project’s schedule performance and variances. A new research study conducted by Construction Industry Institute (CII) has suggested augmenting SPI with a new way of evaluating and assessing performance.
Schedule beta(β) originates from stock performance index in finance and has a potential to become a new standard of measuring performance and quantifying systematic and specific risk in a project’s duration-based metrics.
This technical paper will demonstrate a mathematical formulation and will exhibit the practicality of applying schedule beta to determine a project’s duration-based risk or opportunity. A brief introduction, and highlights of the original theory of capital asset pricing model (CAPM) developed in the sixties by Sharp, Lintner and Black, and Fischer, Jensen and Scholes will be presented. The theory will then be customized and applied to a sample project for the purpose of investigating that project’s risks and measuring its performance versus other projects in a portfolio.