Schedule Variance (SV)

Potential Causes of Favorable Cost Performance:

• Efficiencies being realized
• Work less complex than anticipated
• Fewer revisions and rework
• Favorable Market Fluctuations in the Cost of Labor or Material
• Overhead Rate Decreases

...

1. Organize the project team & the scope of work, using a work breakdown structure. Each task should have a single WBS number and organizational code.
2. Schedule the tasks in a logical manner so that lower level schedule elements & the top level milestones.
3. Allocate the total budg...

• Planned Value (PV) - How much work should be done?
• Earned Value (EV) - How much work was done?
• Actual Cost (AC) - How much did the work cost?
• Budget at Completion (BAC) - What is the total job budgeted to cost?
• Estimate at Completion (EAC) - What do we expect ...

Project Management Institute. (2004) A Guide to the Project Management Body of Knowledge (PMBOK® Guide). (Third ed.) Newtown Square, PA: Project Management Institute

Project Management Institute. (2005) Practice standard for earned value management (PMI Global Standard) (2005 ed.) Newtown S...

Another analysis that can be done by using EVMS is that of Performance or establishing the project’s burn rate.

Two examination of performance are available to the project manager, Schedule Performance Index (SPI) and Cost Performance Index (CPI).

Actual Cost (AC), also called actual expenditures, is the cost incurred for executing work on a project. This figure tells you what you have spent and, as with Planned Value, can be looked at in terms of cumulative and current.

• Cumulative AC

To report the accomplishments of the project, you must apply Earned Value (EV) to the figures and calculations in the project. EV is the quantification of the “worth” of the work done to date.

In other words, EV tells you, in physical terms, what the project has accompl...

The cost variance is defined as the “difference between earned value and actual costs. (CV = EV – AC)” (PMI, 2004, p. 357)

Sometimes this formula is expressed as the difference between budgeted cost of work performed and actual cost work performed.

*VERY IMPORTANT*

The CPI is defined by PMI’s PMBOK® Guide as a measure of cost efficiency on a project.

It is the ratio of earned value (EV) to actual costs (AC). The CPI is equal to the earned value divided by the actual costs, CPI = EV – AC.

Assuming your CPI efficiency remains the ...

Planned Value describes how far along project work is supposed to be at any given point in the project schedule and cost estimate.

PV, also known as Budget Cost of Work Scheduled (BCWS), can be defined as:

• Define Scope: What you are tasked to do ...

Anticipating future progress requires determining when the project will be completed and how much it will cost to complete it.

The Estimate at Completion (EAC) is the actual cost to date plus an objective estimate of costs for remaining authorized work.

The objective in preparing an E...

Earned Value Analysis (EVA) is a method that allows the project manager to measure the amount of work actually performed on a project beyond the basic review of cost and schedule reports.

EVA provides a method that permits the project to be measured by prog...

The PM will be provided with financial information from accounting that will expressed the actual cost incurred on the project's work is performed, then the PM will seek information from the team that will state the budgeted cost of work performed on the project, or earned value.

After thos...

Earned Value Management Systems allow the project manager to answer the following three questions, as they relate to the project:

Where have we been?

Where are we now?

Where are we going?

In Earned Value Management, unlike in traditional manageme...

The SPI is defined by PMI’s PMBOK® Guide as “a measure of schedule efficiency on a project.

It is the ratio of earned value (EV) to planned value (PV). The SPI is equal to earned value divided by planned value, SPI = EV/PV.

An SPI equal to or greater than one indi...