ASSIGNMENT
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calculating_earned_value.docCalculating Earned Value
Yes, you too can simultaneously monitor and control both schedule and cost using the formulas we have included in this document.
First, you have to understand the terms and get familiar with their acronyms.
Definition of Terms |
How It Works/What It Determines/How You Use It |
|
Earned value (EV) |
Budgeted cost of work performed |
|
Budgeted cost of work scheduled (BCWS) |
Use BCWS to represent the value of work to be budgeted. |
|
Actual cost of work performed (ACWP) |
Use ACWP to represent the total cost spent to complete the task. |
|
Budgeted cost of work performed (BCWP) |
This is also known as earned value. |
|
Cost variance (CV) |
This is the difference between the planned and actual costs for the completed tasks. It can either be a positive or negative value. |
|
Cost variance percentage (CV%) |
Always express this as a percentage. A positive value indicates that the project is under budget. A negative value means that the project is over budget. |
|
Schedule variance (SV) |
This is the difference between the planned and actual costs for the completed tasks. It can either be a positive or negative value. |
|
Schedule variance percentage (SV%) |
Always express this as a percentage. A positive value indicates that the project is on schedule. A negative value means that the project is off schedule. |
|
Estimate at completion (EAC) |
Use this to recalculate a project budget to obtain a more accurate value of what the project will cost at the end. |
Formulas for Calculating Earned Value
Determining Schedule Variances(+)Variance = Ahead of Schedule(-)Variance = Behind Schedule |
|
SV = BCWP less BCWS |
|
SV% = SV divided by BCWP |
|
SPI = BCWP divided by BCWS |
|
% Complete = 100 x SPI |
Determining Cost Variances(+)Variance = Below Budget(-)Variance = Over Budget |
|
CV = BCWP less ACWP |
|
CV% = CV divided by BCWP |
|
CPI = BCWP divided by ACWP |
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EAC = BAC times (ACWP divided by BCWP) |
