EVM - Earned Value Management (& Other Formulas)

Question 1

Cost Performance Index (CPI)

Answer 1

CPI=EV/AC (Hint: Index is something divided by something) < 1 Over budget = 1 On budget > 1 Under budget

Question 2

To-Complete Performance Index (TCPI) (Using EAC)

Answer 2

TCPI=(BAC-EV)/(EAC-AC) (Hint: What’s left to do divided by predicted amount of cash left) < 1 Under budget = 1 On budget > 1 Over budget

Question 3

Earned Value (EV)

Answer 3

EV=% complete x BAC

Question 4

Float/Slack

Answer 4

LS-ES LS = Late start ES = Early start LF – EF LF = Late finish EF = Early finish = 0 On critical path < 0 Behind schedule

Question 5

Estimate at Complete (EAC)

Answer 5

EAC=BAC/CPI (Hint: Account for pennies lost on the dollar)

Question 6

To-Complete Performance Index (TCPI) (Using BAC)

Answer 6

TCPI=(BAC-EV)/(BAC-AC) (Hint: What’s left to do divided by what cash is left) < 1 Under budget = 1 On budget > 1 Over budget

Question 7

Standard Deviation

Answer 7

(P-O)/6 O= Optimistic estimate P= Pessimistic estimate

Question 8

Variance at Completion (VAC)

Answer 8

VAC=BAC-EAC < 0 Over budget = 0 On budget > 0 Under budget

Question 9

Estimate to Complete (ETC)

Answer 9

ETC=EAC-AC (Hint: How much more do you need?)

Question 10

PERT Estimation

Answer 10

(O+4M+P)/6 O= Optimistic estimate M= Most Likely estimate P= Pessimistic estimate

Question 11

Schedule Variance (SV)

Answer 11

SV=EV-PV (Hint: Variance is something minus something) < 0 Behind schedule = 0 On schedule > 0 Ahead of schedule

Question 12

Planned Value (PV)

Answer 12

PV=% planned completion (Hint: someone always had to tell you where you are int he project)

Question 13

Cost Variance (CV)

Answer 13

CV=EV-AC (Hint: EV always comes first) < 0 Over budget = 0 On budget > 0 Within budget

Question 14

Schedule Performance Variance (SPI)

Answer 14

SPI=EV/PV (Hint: Schedule always uses planned value. Costs are always actual costs) < 1 behind schedule = 1 on schedule > 1 ahead of schedule

Question 15

Five EVM Rules to Memorize

Answer 15

1. Always start with earned value.
2. Variance means subtraction.
3. Indexes are “something” divided by “something” and they show
   performance for the project objectives.
4. When it comes to any index, the closer to 1 the better.
5. Variances can be positive or negative.

Question 16

Communication channels formula

Answer 16

N(N-1)/2, where N represents the number of stakeholders

Question 17

Future Value (FV)

Answer 17

FV = PV(1+i) Future Value(FV), in where: FV is the value to be determined PV is the current investment i is the interest rate n is the number of time periods