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![NAME DEFINITION EQUATION
VALUE
2nd week
EAC | ESTIMATE AT
COMPLETION
If the CPI is expected to be the same for the remainder of the
project, EAC can be calculated using EAC = BAC/CPI $44286.979
If future work will be accomplished at the planned rate, use: EAC = AC + BAC – EV $48000
If the initial plan is no longer valid, use: EAC = AC + Bottom-up ETC
If both the CPI and SPI influence the remaining work, use EAC = AC + [(BAC – EV)/(CPI x SPI)] $48398.899
ETC | ESTIMATE TO
COMPLETION
Assuming work is proceeding on plan, the cost of completing the
remaining authorized work can be calculated using:
ETC = EAC – AC $28786
Reestimate the remaining work from the bottom up ETC = Reestimate
VAC | VARIANCE AT
COMPLETION
The estimated difference in cost at the completion of the project.
Positive = Under planned cost
Neutral = On planned cost
Negative = Over planned cost
VAC = BAC – EAC $5713.021
1/21/2016
10
FORECASTEDVALUES](https://image.slidesharecdn.com/earnedvalueanalysis-160121130731/85/Earned-value-analysis-10-320.jpg)
Uploaded byNikhil Raj
Earned value analysis
The document provides an overview of Earned Value Management (EVM), a methodology that integrates scope, schedule, and resource measurements to evaluate project performance. It outlines key concepts such as Budgeted at Completion (BAC), Planned Value (PV), Earned Value (EV), and provides calculations for schedule and cost variances. Additionally, it includes an example of a project to illustrate the application of EVM metrics and forecasting techniques.
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Earned value analysis
- 1. Earned Value Analysis ByEr. NikhilRaj BAC BUDGETED AT COMPLETION PV PLANNED VALUE EV EARNED VALUE SV SCHEDULE VARIANCE CV COST VARIANCE SPI SCHEDULE PERFORMANCE INDEX CPI COST PERFORMANCE INDEX EAC ESTIMATE AT COMPLETION ETC ESTIMATE TO COMPLETION VAC VARIANCE AT COMPLETION 1/21/2016 1all rights reserved to www.tutomaash.com | any queries can be mailed to tutomaash@gmail.com Performance measuring system | Forecasting system
- 2. Contents • What isearned value? • Why earned value? • EVM practiced industries • Application example • Application of same example in primavera p6 • Generation of financial s-curve 1/21/2016 2
- 3. Definition Earned value management(EVM) is a methodology that combines scope, schedule, and resource measurements to assess project performance and progress. It is a commonly used method of performance measurement for projects. It integrates the scope baseline with the cost baseline, along with the schedule baseline, to form the performance baseline, which helps the project management team assess and measure project performance and progress - PMBOK 5th Edition Pg.217 1/21/2016 3
- 4. Why EVM? Quantify andmeasure program/contract performance, Provide an early warning system for deviation from a baseline, Mitigate risks associated with cost and schedule overruns, Provide a means to forecast final cost and schedule outcomes 1/21/2016 4
- 5. EVM practiced industries Departmentof Defense (DoD) The Federal government Construction IT sector Commercial sector R&D Aerospace 1/21/2016 5
- 6. Example 2 weeks intothe project Ms Ann completed 35MILES Also spent $15500 “Calculate the Performance” Imagine Ms Ann is the project manager of 100 miles road work She must finish the project in 5 weeks She can spent $10000/week PLANNED ACTUAL 2W 4W 3W 2W 1W 5W 1/21/2016 6
- 7. PLANNED VS ACTUAL TOTALPROJECT BUDGET=$50000 PLAN (TIME) W1 W2 W3 W4 W5 PLAN (COST) $10000 $20000 PV $30000 $40000 $50000 BAC PLAN (%COMPLETE) 20% 20MILES 40% 40 MILES 60% 60 MILES 80% 80 MILES 100% 100 MILES ACTUAL (TIME) W1 W2 W3 W4 W5 ACTUAL (COST) $15500 AC ACTUAL (%COMPLETE) 35% 35 MILES 1/21/2016 7
- 8. NAME DEFINITION EQUATION VALUE 2ndweek INTERPRETATION BAC | BUDGETED AT COMPLETION The value of total planned work, the project cost baseline $50000 PV | PLANNED VALUE COST The value of the work planned to be completed to a point in time, usually the data date, or project completion $20000 EV | EARNED VALUE COST The planned value of all the work completed (earned) to a point in time, usually the data date, without reference to actual costs $17500 AC | ACTUAL COST The actual cost of all the work completed to a point in time, usually the data date $15500 CV | COST VARIANCE The difference between the value of work completed to a point in time, usually the data date, and the actual costs to the same point in time CV = EV – AC $2000 Positive = Under planned cost Neutral = On planned cost Negative = Over planned cost SV | SCHEDULE VARIANCE The difference between the work completed to a point in time, and the work planned to be completed to the same point in time. SV = EV – PV -$2500 Positive = Ahead of Schedule Neutral = On schedule Negative = Behind Schedule CPI | COST PERFORMANCE INDEX A measure of the cost efficiency of budgeted resources expressed as the ratio of earned value to actual cost. CPI = EV/AC 1.129 >1.0 = Under planned cost Exactly 1.0 = On planned cost <1.0 = Over planned cost SPI | SCHEDULE PERFORMANCE INDEX A measure of schedule efficiency expressed as the ratio of earned value to planned value SPI = EV/PV 0.875 >1.0 = Ahead of schedule Exactly 1.0 = On schedule <1.0 = Behind schedule VALUESCALCULATED USINGEQUATION VALUES FROM ACTUAL VALUES FROM PLAN 1/21/2016 8
- 9. Project forecast 2WBAC= $50000(Planned budget) EAC= $44287 (Forecasted Budget calculated Based On 2nd week actual values) ETC= EAC-AC =$28786 (money to finish project)AC= $15500 1/21/2016 9
- 10. NAME DEFINITION EQUATION VALUE 2ndweek EAC | ESTIMATE AT COMPLETION If the CPI is expected to be the same for the remainder of the project, EAC can be calculated using EAC = BAC/CPI $44286.979 If future work will be accomplished at the planned rate, use: EAC = AC + BAC – EV $48000 If the initial plan is no longer valid, use: EAC = AC + Bottom-up ETC If both the CPI and SPI influence the remaining work, use EAC = AC + [(BAC – EV)/(CPI x SPI)] $48398.899 ETC | ESTIMATE TO COMPLETION Assuming work is proceeding on plan, the cost of completing the remaining authorized work can be calculated using: ETC = EAC – AC $28786 Reestimate the remaining work from the bottom up ETC = Reestimate VAC | VARIANCE AT COMPLETION The estimated difference in cost at the completion of the project. Positive = Under planned cost Neutral = On planned cost Negative = Over planned cost VAC = BAC – EAC $5713.021 1/21/2016 10 FORECASTEDVALUES
- 11. See Mix in Action! https://mix.office.com/watch/1otxpj7hz6kbx (Copythe link and paste into your browser. Or, when in a slide show, click the photo.) 1/21/2016 11
- 12. Get the add-in OfficeMix Learn more at http://aka.ms/officemix 1/21/2016