Glossary B 02

Question 1

Earned Value Management (EVM)

Answer 1

is a project management technique that combines measurements of project scope, schedule, and cost in a single, integrated system.

Question 2

Earned Value Management (EVM) B

Answer 2

EVM is used to assess project performance and progress by comparing the planned progress and costs to the actuals, enabling project managers to understand if the project is on track or facing any cost or schedule variances.

Question 3

01 . Core EVM Metrics

Answer 3

01 . Planned Value (PV)
02 . Earned Value (EV)
03. Actual Cost (AC)

Question 4

• Planned Value (PV)

Answer 4

The budgeted amount for the work scheduled to be completed by a given date. It shows how much work should be done at a specific point in time.

Question 5

• Earned Value (EV)

Answer 5

The budgeted amount for the actual work completed by a given date. It represents the value of the work actually performed.

Question 6

• Actual Cost (AC)

Answer 6

The actual cost incurred for the work completed by a given date.

Question 7

02 . Key EVM Performance Indicators

Answer 7

01 . Cost Variance (CV)
02 . Schedule Variance (SV)

Question 8

• Cost Variance (CV)

Answer 8

CV=EV−AC This measures cost performance by showing if the project is under or over budget.
If CV > 0: The project is under budget; If CV < 0: The project is over budget.

Question 9

• Schedule Variance (SV)

Answer 9

SV=EV−PV This measures schedule performance, indicating if the project is ahead or behind schedule. If SV > 0: The project is ahead of schedule; If SV < 0: The project is behind schedule.

Question 10

03 . Performance Index

Answer 10

01 . Cost Performance Index (CPI)
02 . Schedule Performance Index (SPI)

Question 11

• Cost Performance Index (CPI)

Answer 11

CPI= EV / AC This index shows the cost efficiency of the work completed.
If CPI > 1: The project is cost-efficient; If CPI < 1: The project is costing more than planned.

Question 12

• Schedule Performance Index (SPI)

Answer 12

SPI= EV / PV This index shows the schedule efficiency of the work completed.
If SPI > 1: The project is ahead of schedule; If SPI < 1: The project is behind schedule.

Question 13

04 . Forecasting Metrics

Answer 13

01 . Estimate at Completion (EAC)
02 . Estimate to Complete (ETC)
03 . Variance at Completion (VAC)

Question 14

• Estimate at Completion (EAC)

Answer 14

Estimate at Completion (EAC): A forecast of the total cost at project completion based on current performance.
Formula: EAC= BAC​ / CPI , where BAC is the Budget at Completion.

Question 15

• Estimate to Complete (ETC)

Answer 15

The expected cost to finish all remaining project work.

Question 16

• Variance at Completion (VAC)

Answer 16

Shows the expected budget surplus or deficit at project completion.
Formula: VAC=BAC−EAC

Question 17

Benefits of EVM

Answer 17

Improves Visibility: EVM provides insight into both current performance and future project trends.
Identifies Risks Early: Variances in cost and schedule are visible early, allowing corrective actions.
Quantifies Project Health: The metrics make it possible to quantify progress, budget status, and time performance.
Enables Better Decision-Making: Project managers and stakeholders can make informed decisions to optimize resources, adjust schedules, or control costs.

Question 18

Challenges of EVM

Answer 18

Requires Accurate Baselines: EVM relies heavily on accurate baselines for cost and schedule, making it difficult if initial estimates are inaccurate.

Complexity in Implementation: Tracking and analyzing EVM metrics can be complex, especially in large or dynamic projects.

Focus on Cost Over Quality: EVM highlights cost and schedule, but quality and resource availability may need separate metrics.

Question 19

To-Complete Performance Index (TCPI)

Answer 19

is an Earned Value Management (EVM) metric that helps determine the level of cost performance required to complete a project within a specified budget.

Question 20

To-Complete Performance Index (TCPI)

Answer 20

Essentially, it shows how efficiently remaining funds need to be used to meet a specific goal, especially when a project is off track or when budget constraints are tight.