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Earn Value Management (Control Cost) : Percent

Earn Value Management (EVM) is used to measure project performance by comparing the planned work (budgeted cost of work scheduled - BCWS) to the actual work performed (budgeted cost of work performed - BCWP). Key EVM metrics include: 1) Cost Variance (CV) and Cost Performance Index (CPI) which measure cost efficiency. 2) Schedule Variance (SV) which measures schedule performance. 3) Estimate at Completion (EAC) which predicts the final cost based on past performance. 4) To Complete Performance Index (TCPI) which calculates the future performance needed to meet goals.

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Maheswaren Mahes
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79 views1 page

Earn Value Management (Control Cost) : Percent

Earn Value Management (EVM) is used to measure project performance by comparing the planned work (budgeted cost of work scheduled - BCWS) to the actual work performed (budgeted cost of work performed - BCWP). Key EVM metrics include: 1) Cost Variance (CV) and Cost Performance Index (CPI) which measure cost efficiency. 2) Schedule Variance (SV) which measures schedule performance. 3) Estimate at Completion (EAC) which predicts the final cost based on past performance. 4) To Complete Performance Index (TCPI) which calculates the future performance needed to meet goals.

Uploaded by

Maheswaren Mahes
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Earn Value Management ( Control Cost)

Cost Variant (CV) Provides cost performance of the project. Helps determine if the project is arranged as planned CV = EV AC If -ve = Bad (over Budget) +ve = Good ( under Budget) Cost Performance Index (CPI) Measure of cost efficiency on a project. Ratio of earned value to actual cost. CPI = EV / AC 1 = good We getting $1 for every $1 spent ( Funds are used as Planned) >1 = Very good We are getting >$1 for every $1 spent <1 = Bad We are getting <$1 for every $1 spent. ( Funds are not used as Planned) Schedule Variant (SV) Provides schedule performance of the project. Helps determine if the project work is arrange as planned SV = EV PV If -ve = Bad (Behind Schedule) +ve = Good ( Ahead of Schedule) EAC (Estimate At Complete) Expected final and total cost of an activity or project based on project performance. Helps determine an estimate of the total costs of a project based on actual costs to date. There are several ways to calculate EAC depending on the current project situation and how the actual work is progressing as compared to the budget. EAC = AC + ETC (bottom-up) Use formula if original estimate was fundamentally flawed or conditions have changed and invalidated original estimating assumptions. EAC = BAC / CPI Use formula if current variances are through to be typical in the future (Assuming future performance will behave like past performance) EAC = AC + BAC-EV Use formula if current variances are thought to be atypical(Not same) in the future and the original

budget is more reliable EAC = AC + (BAC EV) / (CPI *SPI ) Use formula if project is over budget but still needs to meet a schedule deadline. ETC (Estimate To Complete (ETC) Expected cost needed to complete all the remaining work for a schedule activity, a group of activities or the project. Helps predict what the final cost of the project will be upon completion. There are many way to calculate ETC depending on the assumptions made. ETC = EAC AC Recommend using it if no keywords are given ETC = BAC EV Use formula if current variances are thought to be atypical (not same) in the future ETC = (BAC EV) / CPI Use formula if current variances are thought to be typical in the future
Percent Complete

How much of the planned budget do we have completed? Percent Complete = EV / BAC * 100 To Compelete Performance Index (TCPI) It is projected performance level the remaining work of the project must achieve in order to meet the BAC or EAC. The calculated project of cost performance that must be achieved on the remaining work to meet a specific management goal (e.g BAC or EAC). Based on BAC TCPI = (BAC EV) / (BAC AC) Based on EAC TCPI = (BAC-EV) (EAC AC) Variance At Completion (VAC) Anticipates the difference between the originally estimated BAC and a newly calculated EAC VAC = BAC EAC If 0 = on Budget <0 = Over Budget >0 = Under Budget Earned Value (EV) EV % complete * BAC

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