Question

# Earned Value Management (EVM) is a project management technique for measuring project performance (schedule, cost mainly)...

Earned Value Management (EVM) is a project management technique for measuring project performance (schedule, cost mainly) and progress in an objective manner in terms of work achieved (Value): The data identified below was listed in a project’s status report. At time of status report: Planned Value of work (PV) = \$70,000 Earned Value of work performed (EV) = \$50,000 Actual Cost of work performed (AC) = \$75,000 Original Planning: Budgeted cost At Completion (BAC) = \$110,000 Original length of the project is 15 months Using the data, calculate the following: a) Cost Performance Index (CPI). (1 mark) b) Schedule Performance Index (SPI). (1 mark) c) Expected cost At Completion (EAC). (1 mark) d) Estimate To Complete (ETC). e) The Schedule Variance (SV). f) Discuss how the project is tracking (e.g. ahead or behind schedule, under or over budget)?

a)CPI = EV /AC

CPI = 50000/ 75000

CPI = 0.66

b) SPI= EV / PV

SPI = 50000/70000

SPI = 0.71

(c) EAC = BAC / CPI

EAC= 110000/ 0.66

EAC = 166,666.66 USD

(d) ETC = EAC- AC

ETC= 166,666.66 - 75000

ETC = 91,666.66 USD

(e) SV= EV - PV

SV = 50000-70000

SV= -20000 USD

(f)

The SV is negative means project is behind the schedule.

The SPI is less than one means the project is behind the Schedule.

The CPI is less than one indicates that the earning is less than what you have spent on the project.

It means the project is OVER BUDGET.