8-4. Earned Value Analysis

Earned value analysis is a technique for monitoring both the cost and schedule performance of a project. It is a means of comparing actual performance with planned performance. Let’s begin with some definitions.
The planned value (PV), formerly called the budgeted cost of work scheduled (BCWS), also called the budget, is that portion of the approved total cost estimate planned to be spent on an activity during a given period
Actual cost (AC), formerly called actual cost of work performed (ACWP), is the total of direct and indirect costs incurred in accomplishing work on an activity during a given period
The earned value (EV), formerly called the budgeted cost of work performed (BCWP), is the percentage of work actually completed multiplied by the planned value
Variances
Cost/Spending Variance : EV – AC
Schedule Variance: EV – PV
Cost Performance Index (CPI): EV/AC
Schedue Performance Index (SPI): EV/PV
Estimated (Remaining Cost) to Completion (ETC)

ETC = (BAC – EV)/CPI

(Total Cost) Estimated at Completion (EAC)

EAC = ETC + AC

or EAC= (AC/EV)*BAC

Leave a Reply