Question

Activity	PV (in $)	EV (in $)	AC
A	9,200	10,000	9,700
B	23,000	20,000	18,000
C	12,000	13,000	11,000
D	8,000	10,000	12,000
E	10,000	12,000	13,000
F	7,000	9,000	10,000
G	8,000	9,000	10,000

1. A project to develop a country park has an actual cost in month 17 of $350,000, a planned cost of $475,000, and a value completed of $300,000. Find the cost and schedule variances, and CPI and SPI. What meaning do you derive from the CPI and SPI?

Answer 1

Earned Value Management (EVM) is nothing but important technique by which the time and cost performance of a project is controlled.

The three metrics of earned value management are: -

Planned Value (PV)

Actual Cost (AC)

Earned Value (EV)

Earned value is the approach where project plan, actual work and work completed value can be monitored in order to see if a project is on track. It shows how much of the project budget and schedule should have been spent based on the amount of work done so far.

Schedule variance can be calculated using earned value and planned value.

SV = EV - PV

Where, SV = schedule variance

EV = earned value

PV = planned value

Positive value of schedule variance indicate that the work not yet schedule to be completed at this time has been done. Negative value of schedule variance indicates the work schedule to be completed at this time is not done.