Earned Value Management

Difference between EV and your plan (PV) = Schedule Variance Difference between EV and your spending (AC) = Cost Variance Note: Remember, a positive variance is good for your project. It means you are ahead of schedule or under budget. Ratio of Earned Value to plan (PV) = Schedule Performance Index Ratio of Earned Value to cost (AC) = Cost Performance Index Note: Remember, a number greater than 1 means you are ahead of schedule or under budget. First, A Few Calculations: Planned Value (Budgeted Cost of Work Scheduled or the Total amount of work effort for the sum of all tasks or YOUR PROJECT BUDGET) = 20+40+65+50 = $175 Earned Value (Budgeted Cost of Work Already Performed or How much SHOULD it have cost you to this point in your project?) = 20+30+25+0=$75 Actual Cost (of the work performed) = $100 (Number Gained from Accounting Dept � or how much did it ACTUALLY cost you to perform this work?) Calculating Cost Performance Index (CPI) Cost Variance = 75 � 100 = -25 (The cost variance is the difference between the Earned Value and the Actual Cost. In the example above, our Accounting Dept gave us the �actuals� of $100, so there is a -$25 cost variance. We�re over budget by $25.) The Cost Performance Index is 75/100 = .75. The Earned Value Calculations conclude that, at this point in time, the project is over budget (notice the value is less than 1) for work accomplished, meaning, at this run rate, you will need $233.33 to complete the project rather than the initially budgeted $175. Calculating Schedule Performance: Schedule Variance = 75 - 110 = -35 (The schedule variance between the Earned Value and the Scheduled Work completed time, noted here by a red �Date of EV Measurement� Line. Schedule Performance Index = 75/110 = .68 (meaning you�ve project deliverables at this point in time. You�re behind

is the difference at a certain point in completed 68% of your schedule).