Earned Value Flashcards
what is earned value?
earned value, as a quantity,represents the amount of work achieved at any given point in time
- every task in the project has an earned value associated with it at any given time
- earned value of each task is zero at the start
- when a task is complete, its earned value is declared to be the amount equal to the amount allocated to the task

how do you calculate earned value?
earned value = total budget x %complete
earned value (task) = total budget (task) x %complete (task)
PC =
planned cost the amount that is planned to have spent at any particular time
AC =
actual costs of the work
How is EV used?
- record is made of each task and progress made (% complete)
- EVs are calculated and added up
- ACs are recorded and added up
- Plotted against Planned cost (PC) on S-curve)
- This can show whether project is on time/on budget
what three variances can be calculated from EV data
CV = cost variance SV (cost) = schedule variance SV (time) = schedule variance
what is CV
the difference between the value of the work performed and the money spent on it CV = earned value - actual costs
SV (cost)
difference between what was planned to have been achieved in terms of value delivered and what has actually been achieved
SV (cost) = earned value - planned cost
SV (time)
shows how far behind (or ahead) the project or activity is, compared to what was planned SV (time) = original duration - time now
what are performance indicies?
- when quantities used to calculate variances are combined to give performance indicies
- e.g. CPI - cost performance
- SPI (cost-based) -schedule performance
- value close to 1.0 represents planned situation
- value < 1 is a problem
- value > 1 is desirable (better than planned)
CPI =
CPI = earned value/ actual cost
SPI (cost based)
SPI (cost-based) = earned value/ planned budget
SPI (time)
SPI (time) = original duration/actual time achieved
what is forecasting ?
To predict the state of the project at completion using baseline plan and earned value data, principally one of the variances or performance indicies
advantages of EVA
- shows time and cost on one report
- trends can be identified and corrective action taken
- cost and schedule variances can used for forecasting
- enables calculation of overall % completion of project which is of interest to senior managers
limitations of EVA
- analysis is only meaningful if baseline budget estimate is robust (a good representation of the work)
- does not represent a full picture of how close the project is to fulfilling its objectives (e.g. meeting customer requirements)
- over optimistic reporting on progress reports
What is BAC?
Budget at completion
It is synonomous with total budget
Every Task, Workpackage and Project has its own BAC, which is the maximum amount of effort that the plan says will be used for its completion.
The earned value of a task is calculated by which formula?
Select one:
A. Planned budget x percentage task complete.
B. Total task budget x percentage task complete.
C. Total project budget x percentage task complete.
D. Actual cost x percentage task complete.
B. Total task budget x percentage task complete
Remember, to get a statistic that reports progress, we need to compare it against a baseline figure. So we multiply % complete by baseline figure, (task budget).
When would you use variances to forecast?
Assumption 1: things will go as planned
Use when less than 30% of project is done
When would you use performance indicators to forecast?
Assumption 2: Things will go as they are going now
Data about performance will be representative of likely future
When over 30% of project is complete
How to forecast final project duration using assumption 1
final project duration = planned project time - schedule variance
How to forecast final cost and cost overrun using assumption 1
estimated final cost = budget - cost variance
cost overrun = estimated final cost - budget
How to forecast final project cost using assumption 2 and overrun
final project cost = budget/CPI
overrun = esimated final cost - budget
How to calculate final project duration using assumption 2
estimated final project duration = planned completion time / SPI(cost)