Lecture 4B - Earned value management Flashcards
What is EVM?
Earned value management
- Integrates project scope, cost and schedule to assess a project’s performance and progress.
- Measures performance of a project at any point in time or duration
What is the cost schedule plan?
- Plot of a project’s planned cumulative costs that serves as basis for comparison with actual cost of work performed.
What is cost control
- Done to detect cost overrun
- it allowed for timely corrective actions to minimize or eliminate impacts of cost overrun.
What is productivity
- Measure of the profres of work done against a strandard such as project schedule.
What is an s-curve
Used as a means of predicting project cash flow requirements.
- Provides an idea as to how the project budget will be spent if the work is constructed exactly as estimated and scheduled.
- Constructed from cumulatively adding the costs from the WBS.
What is planned value (PV)
- Authorized budget assigned to the work to be accomplished for an activity.
What is Earned value (EV)
- how much of the budget should have been spent based on the actual amount of work performed.
= % complete x total budgeted cost.
Actual cost (AC)
Actual cost incurred in accomplishing the cost.
Budget at completion (BAC)
Total PV (planned value) of a project.
Cost variance (CV)
is a measure of the cost performance on a project
CV = Earned value (EV) - Acutal cost (AC)
if + -> underbudget -> good
if - -> overbudget
Schedule variance (SV):
Measure of the schedule performance of a project
SV = Earned Value (EV) - Planned value (PV)
+ -> ahead of schedule -> good
What is cost performance index (CPI)
Alternative to CV, efficiency indicator that mesures cost efficiency for work completed.
CPI = EV / AC
- CPI value greater than 1 -> cost underrun of performance to date.
Inneficiency = 1 / CPI
Schedule performance index (SPI)
alternative to schedule variance SV, measures progress achieved compared to progress planned on a project.
SPI = earned value / planned value
if greater than 1 -> more work was completed than was planned.
Estimated remaning cost to completion (ETC)
remaining till completion
ETC = (BAC - EV) / CPI
- Assumed that project will be completed at the same level of efficiency or inefficiency.
ETC = BAC - EV
- assuming CPI in future = 1
- variances in future will not be the same as current variances
Estimated at completion cost ( EAC)
= ETC + AC