10.2: Earned Value Analysis
Notes
Earned Value Calculations Tables
As you read this section, fill in the blanks in the tables below:
| Cost _______ | |
| Term | Description/Calculation |
| CV | Cost __________ Compares budgeted costs to the actual amount spent. |
| CV = ____ – _____ | |
| ________ number = over budget. | |
| ________ number = under budget. | |
| Schedule ________ | |
| Term | Description/Calculation |
| SV | Schedule ________ Compares the work that should have been done at this time, to the amount actually completed. |
| SV = ____ – _____ (Note: PV at this point in time, not total PV for activity.) |
|
| ______ number = work scheduled to be complete at this time is not done. | |
| ______ number = work NOT yet scheduled to be complete at this time has been done | |
| Note: When a task or project is complete, its SV will equal 0, regardless of whether the project is completed late or early. Therefore SV is useful when a task is underway or when the bulk of the project work is being performed. Project managers should also use the baseline schedule when making judgements about project schedule performance. | |
| Cost Performance _______ | |
| Term | Description/Calculation |
| CPI | Cost Performance ______. Measures how effectively we are using our budget. |
| CPI = ___/____ | |
| CPI __ 1 : Over Budget | |
| CPI __ 1 : On Budget | |
| CPI __ 1 : Under Budget | |
| Schedule Performance _______ | |
| Term | Description/Calculation |
| SPI | Schedule Performance ______. Measures how efficiently we are completing the scheduled work. |
| SPI = ___/____ (Note: PV at this point in time, not total PV for activity.) |
|
| SPI __ 1 : Behind Schedule | |
| SPI __ 1 : On Schedule | |
| SPI __ 1 : Ahead of schedule | |
| Note: When a task or project is complete, its SPI will equal 1, regardless of whether the project is completed late or early. Therefore SPI is useful when a task is underway or when the bulk of the project work is being performed. Project Managers should also use the baseline schedule when making judgements about project schedule performance. | |
| Forecasting | |
| Term | Description/Calculation |
| ETC * | Estimate to _____________. What the remaining work will cost if our current CPI holds. |
| ETC= (____ – ____) / CPI or ETC= (___ – ____) / (____ / _____ ) | |
| EAC * | Estimate cost At ________________. What the project will cost if our current CPI holds |
| EAC =___ + ___ | |
| VAC * | Variance At _____________ |
| VAC = _____- _____ | |
| * If our baseline is inaccurate, or if we have reason to believe that CPI will not remain the same, ETC, EAC, and VAC may be based on revised estimates (sometimes referred to as ETCre, EACre, and VACre respectively). | |
| Percent Complete | |
| Term | Description/Calculation |
| PCIB | Percent Complete Index—_______ |
| PCIB = ___/ _____ | |
| The percentage of work that is complete based on baseline budget. Use this if we trust our initial project baseline. | |
| PCIC | Percent Complete Index—Cost |
| PCIC = _____ / EACre | |
| The percentage of work that is complete based on revised estimate of the project costs. Used if we have to revise baseline, are using rolling wave planning, etc. | |
| To Complete Performance Index | |
| Term | Description/Calculation |
| TCPI | To Complete Performance Index |
| TCPI = (____ – ___) / (____ – ___) | |
| TCPI __ 1 : More Budget than Work Left | |
| TCPI __ 1 : Right amount of remaining Budget for remaining work. | |
| TCPI ___ 1 : More Work than Budget Left | |
Check Your Knowledge
Questions: Earned Value
1. The project PV at this point in time is $100,000. The Actual Costs are $80,000, and the Earned Value is $80,000. Calculate CV and SV and provide your assessment of the project at this point.
2. The project PV at this point in time is $100,000. The Actual Costs are $120,000, and the Earned Value is $130,000. Calculate CV and SV and provide your assessment of the project at this point.
3. Assume Activity A takes four weeks. The work scheduled to be performed each week is $10K.
A. At the end of Week 1, you are told that Activity A has cost $8,000, but is thirty percent complete. Calculate CV and SV and provide your assessment of the activity at this point.
B. At the end of Week 3, you are told that Activity A has cost $35,000, but is sixty percent complete. Calculate CV and SV and provide your assessment of the activity at this point.
4. The BAC for Project Big Dog is $175,000. If the EV at the end of Month 4 is $60,000, and the AC is $45,000:
A. What is the EAC?
B. What is the TCPI?
Matching: Earned Value
Terms may be used multiple times.
A. AC
B. PV
C. EV
D. 50/50 Rule
E. EAC
F. CV
G. BAC
H. SPI
I. Less than
J. Greater than
K. SV
Exercise: Earned Value
You are responsible for calculating the project progress indicators for your project team. Below is the baseline time-phased budget for the project.
| Task | Activity Budget (Total PV) | Month | |||||||
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | ||
| A | $8,000 | $4,000 | $4,000 | ||||||
| B | $18,000 | $6,000 | $6,000 | $6,000 | |||||
| C | $6,900 | $2,300 | $2,300 | $2,300 | |||||
| D | $25,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | |||
| E | $4,000 | $1,000 | $1,000 | $1,000 | $1,000 | ||||
| F | $14,900 | $7,500 | $7,400 | ||||||
| G | $10,000 | $5,000 | $5,000 | ||||||
| H | $9,000 | $4,500 | $4,500 | ||||||
| I | $31,200 | $7,800 | $7,800 | $7,800 | $7,800 | ||||
| J | $11,700 | $3,900 | $3,900 | $3,900 | |||||
| K | $2,000 | $500 | $500 | $500 | $500 | ||||
| L | $9,600 | $2,400 | $2,400 | $2,400 | $1,200 | $1,200 | |||
| Week Total | $11,800 | $17,800 | $23,500 | $23,500 | $27,100 | $23,500 | $16,600 | $6,500 | |
| Cumulative | $11,800 | $29,600 | $53,100 | $76,600 | $103,700 | $127,200 | $143,800 | $150,300 | |
1. What is the BAC for this project?
2. In which month will the majority of the project work be completed?
3. In which month will the least amount of work be completed?
4. At the end of Month 3, you get the following data about how work is progressing:
- Activity A is 100% complete and has cost $8,400.
- Activity B is 50% complete and has cost $10,000.
- Activity C is 33% complete and has cost $2,000.
- Activity D is 20% complete and has cost $3,500.
- Activity I is 100% complete and has cost $35,000.
- Activity L is 10% complete and has cost $1,000.
- None of the other tasks have started.
Use this information to complete the calculations for the Month 3 status report below and answer the related questions.
Status Report: Month 3
| Task | Percent Complete | End of Month 3 | ||||||
| EV | AC | PV | CV | SV | CPI | SPI | ||
| A | ||||||||
| B | ||||||||
| C | ||||||||
| D | ||||||||
| I | ||||||||
| L | ||||||||
| Cumulative Totals | ||||||||
Using the cumulative totals for EV, AC, and PV, calculate the CPI, SPI, TCPI, and PCIB for the project.
| End of Month 3 | |
| CPI | |
| SPI | |
| TCPI | |
| PCIB | |
- How is this project doing in terms of cost?
- How is this project doing in terms of schedule?
- If everything keeps going as well as it has to this point in terms of cost, what will be the cost to complete the remaining work?
- If everything keeps going as well as it has to this point in terms of cost, what will be the final cost of the project?
