Earned Value Management in Project Planning

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What does the Cost Performance Index (CPI) indicate if it is less than 1?

The project is under budget
The project is ahead of schedule
The project is on schedule
The project is over budget (correct)

What is the formula to calculate the Schedule Performance Index (SPI)?

SPI = EV/PV (correct)
SPI = EV/AC
SPI = AC/EV
SPI = PV/AC

What is the purpose of Earned Value Analysis (EVA)?

To predict future project performance (correct)
To calculate the project's cost and schedule variance
To identify the project's critical path
To create a project schedule

What is the formula to calculate the Cost Performance Index (CPI)?

CPI = EV/AC (D) Signup and view all the answers

What does Estimation at Completion (EAC) predict?

The project's final cost (A) Signup and view all the answers

What is the purpose of forecasting techniques in project management?

To predict future project performance and outcomes (A) Signup and view all the answers

What is the formula for Case #3 of Estimation at Completion (EAC)?

EAC = AC + [(BAC – EV) / (CPI * SPI)] (B) Signup and view all the answers

What is the purpose of the Schedule Performance Index (SPI)?

To measure project time efficiency (A) Signup and view all the answers

What is the Earned Value (EV) of the project?

40,000.00 (A) Signup and view all the answers

What does a Cost Variance (CV) of -20,000 indicate?

The project is over budget (B) Signup and view all the answers

What is the formula to calculate Schedule Variance (SV)?

SV = EV - PV (A) Signup and view all the answers

What does a Schedule Variance (SV) of -10,000 indicate?

The project is behind schedule (D) Signup and view all the answers

What is the purpose of Cost Performance Index (CPI)?

To determine the project's cost performance (A) Signup and view all the answers

How is the Earned Value (EV) calculated?

EV = 40% of BAC (C) Signup and view all the answers

What is the purpose of Variance Analysis?

To identify and address deviations from the project's baseline (B) Signup and view all the answers

What is the Planned Value (PV) of the project at the 6th month?

50,000.00 (C) Signup and view all the answers

What is the purpose of Earned Value Analysis in project management?

To assess the project's progress and performance (D) Signup and view all the answers

What is the formula to calculate Planned Value (PV)?

PV = BAC × % complete (planned) (D) Signup and view all the answers

What is the Actual Cost (AC) of the project in the given scenario?

60,000.00 (D) Signup and view all the answers

What is the Earned Value (EV) of the project if 40% of the work has been completed and the project's budget is 100,000.00?

40,000.00 (B) Signup and view all the answers

What is the purpose of the Schedule Performance Index (SPI) in Earned Value Analysis?

To measure the project's schedule performance (C) Signup and view all the answers

What is the purpose of the Cost Performance Index (CPI) in Earned Value Analysis?

To measure the project's cost performance (B) Signup and view all the answers

What is the result of a variance analysis if the project's Earned Value (EV) is greater than its Planned Value (PV)?

The project is ahead of schedule (B) Signup and view all the answers

What is the project's Planned Value (PV) after 9 months if the project's budget is 100,000.00 and the project is 75% complete?

75,000.00 (B) Signup and view all the answers

Study Notes

Earned Value (EV) Management

EV allows project managers to assess the value achieved relative to the planned value, helping to determine if the project is ahead or behind schedule.

Planned Value (PV)

PV is the budgeted cost of work scheduled (BCWS).
PV = BAC × % complete (planned).
Example: Project duration: 12 months, Project budget (BAC): 100,000.00, Elapsed time: 9 months, % complete (planned): 75%, PV = 100,000.00 × 75% = 75,000.00.

Actual Cost (AC)

AC is the total cost incurred by the project.
Example: Elapsed time: 6 months, Actual cost: 60,000.00, AC = 60,000.00.

Earned Value (EV)

EV is the value of the work completed.
EV = % complete × BAC.
Example: Elapsed time: 6 months, % complete: 40%, EV = 40% × 100,000.00 = 40,000.00.

Variance Analysis

Cost Variance (CV): measures the difference between the earned value and actual cost.
CV = EV - AC.
Example: CV = 40,000.00 - 60,000.00 = -20,000.00, CV < 0 indicates over budget.

Performance Indexes

Cost Performance Index (CPI): measures the cost efficiency of the project.
CPI = EV / AC.
Example: CPI = 40,000.00 / 60,000.00 = 0.667, CPI < 1 indicates over budget.
Schedule Performance Index (SPI): measures the schedule efficiency of the project.
SPI = EV / PV.
Example: SPI = 40,000.00 / 50,000.00 = 0.8, SPI < 1 indicates behind schedule.

Forecasting Techniques

Estimation at Completion (EAC): predicts the total cost of a project once it's finished.
Case #1: EAC = BAC / CPI.
Case #2: EAC = AC + (BAC – EV).
Case #3: EAC = AC + [(BAC – EV) / (CPI * SPI)].

Note: These notes are a summary of the key concepts and formulas related to Earned Value Management, Variance Analysis, Performance Indexes, and Forecasting Techniques.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

Assess project progress with Earned Value Management. Learn to calculate Planned Value (PV) and determine if the project is on track. Useful for project managers and planners.