Burn down chart
Encyclopedia
A burn down chart is a graphical representation of work left to do versus time. The outstanding work (or backlog) is often on the vertical axis, with time along the horizontal. That is, it is a run chart
Run Chart
A run chart, also known as a run-sequence plot is a graph that displays observed data in a time sequence. Often, the data displayed represent some aspect of the output or performance of a manufacturing or other business process.- Overview :...

 of outstanding work. It is useful for predicting when all of the work will be completed. It is often used in agile software development
Agile software development
Agile software development is a group of software development methodologies based on iterative and incremental development, where requirements and solutions evolve through collaboration between self-organizing, cross-functional teams...

 methodologies such as Scrum
Scrum (development)
Scrum is an iterative, incremental framework for project management often seen in agile software development, a type of software engineering....

. However, burn down charts can be applied to any project containing tasks with time estimates.

Reading burn down charts

A burn down chart for a completed iteration is shown above and can be read by knowing the following.
X-Axis The project/iteration timeline
Y-Axis The work that needs to be completed for the project. The time estimates for the work remaining will be represented by this axis.
Project Start Point This is the farthest point to the left of the chart and occurs at day 0 of the project/iteration.
Project End Point This is the point that is farthest to the right of the chart and occurs on the predicted last day of the project/iteration
Ideal Work Remaining Line This is a straight line that connects the start point to the end point. At the start point, the ideal line shows the sum of the estimates for all the tasks (work) that needs to be completed. At the end point, the ideal line intercepts the x-axis showing that there is no work left to be completed.
Actual Work Remaining Line This shows the actual work remaining. At the start point, the actual work remaining is the same as the ideal work remaining but as time progresses, the actual work line fluctuates above and below the ideal line depending on how effective the team is. In general, a new point is added to this line each day of the project. Each day, the sum of the time estimates for work that was recently completed is subtracted from the last point in the line to determine the next point.

Measuring performance

Actual Work Line is above the Ideal Work Line If the actual work line is above the ideal work line, it means that there is more work left than originally predicted and the project is behind schedule.
Actual Work Line is below the Ideal Work Line If the actual work line is below the ideal work line, it means that there is less work left than originally predicted and the project is ahead of schedule.

Removing variability in time estimates

One issue that may be noticed in burn down charts is that whether or not the Actual Work line is above or below the Ideal Work line depends on how accurate the original time estimates are. This means that if your team constantly over estimates time requirements, the progress will always appear ahead of schedule. If they constantly under estimate time requirements, they will always appear behind schedule. This issue is corrected by incorporating an efficiency factor into the burn down chart. After the first iteration of a project, the efficiency factor can be recalculated to allow for more accurate estimates during the next iteration. Some templates automatically calculate the efficiency as a project progresses. This can be used to identify areas/phases were inaccurate estimates consistently occur.

Further reading

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