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Calculating Evm in Primavera p6

Earned value management combines measurements of scope, schedule, cost, budget, and work completed to analyze project performance and estimate costs to complete. Planned value is the budgeted cost of work that should be complete, earned value is the budgeted cost of work actually completed, and actual costs are the real costs incurred. Variances between these values indicate if a project is over or under budget and ahead or behind schedule. The cost performance index and schedule performance index can be used with different formulas to optimistically, likely, or pessimistically estimate the cost to complete remaining work.

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941 views19 pages

Calculating Evm in Primavera p6

Earned value management combines measurements of scope, schedule, cost, budget, and work completed to analyze project performance and estimate costs to complete. Planned value is the budgeted cost of work that should be complete, earned value is the budgeted cost of work actually completed, and actual costs are the real costs incurred. Variances between these values indicate if a project is over or under budget and ahead or behind schedule. The cost performance index and schedule performance index can be used with different formulas to optimistically, likely, or pessimistically estimate the cost to complete remaining work.

Uploaded by

aliengineer953
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Calculating Earned Value and Estimate to Complete in

Primavera P6

Introduction to Earned Value


Calculate Planned Value Costs
Calculate Actual Costs
Calculate Earned Value Costs
Estimate to Completion (ETC)
Using CPI/SPI to calculate your ETC
Questions?

What is Earned Value?


Combines Measurements of
Scope
Your Original Plan
Schedule
Current Plan
Cost
Budget vs. Actual
Primavera Variables
Planned Value
Cost & Schedule information comes from baseline
Actual Value
Actual cost
Earned Value
What has physically been built

A Simplified Example: (PV)


10 Day Project to build 10 Concrete Forms
1 Form Per Day
$100 Per Day
Time

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

At the end of day 5


5 Forms Completed
$500
Planned Value (PV) = 500
Time

$100

$100

$100

$100

$100

$100

Lets Just Say..


Day 5
Only 3 Forms Completed
Our Earned Value (EV) = 300
Time

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

Lets also say we have a cost over-run..


Day 5
Only 3 Forms Completed
Each form cost $200 to build
Actual Cost (AC) - ($200 x 3 Days) = $600
Time

$200

$200

$200

$100

$100

$100

$100

$100

$100

$100

We now have our variables to compute Earned Value


Day 5
(PV) = 500
(EV) = 300
(AC) = 600
Day 5
(EV) (PV) = Schedule Variance
300 - 500 = -200
Behind Schedule
(EV) (AC) = Cost Variance
$300 - $600 = $-300
Over Budget

Cost & Schedule Indices


Schedule Index
A ratio of what was earned vs. what was planned
An index less than 1 is behind schedule
An index greater than 1 is ahead of schedule
EV/PV = SPI (Schedule Performance index)
300/500 = .6
Cost & Schedule Indices
Cost index
A ratio of what we Earned vs. the Actual Cost
An index less than 1 is over budget
An index greater than 1 is under budget
EV/AC = Cost Performance Index
$300/$600 = .5

Step 1. Add Activities, Tie Logic, Set % Complete Physical

Step 2. Add Resource Assignments

Step 3: Maintain Baseline and Assign to Project

Step 4: Customize Columns for analysis

Step 5: Update Physical % Complete

Step 6: Update Resource Actual Units (Or Expenses)

Step 7: Schedule Project, Advance Data Date

On Day 5, We can now analyze our Earned Value

Conclusions Based on Earned Value Analysis


Schedule Performance
The baseline indicates that 50% of the work should be complete.
With only 30% Performance % Complete (Actual Labor Units)
This shows the project is behind schedule.

Cost Performance
The baseline indicates that $500 worth of work should be complete
(Planned Value Cost)
As of the Data Date, (Actual cost) is $600 to achieve $300 worth of
work (Earned Value Cost).
This shows the project is over budget

Using CPI/SPI to analyze project efficiency


Cost Performance Index relates the amount of Physical
Work completed vs. the $ spent to accomplish the work
CPI = (EV)/(AC)

Using CPI/SPI to analyze project efficiency


Schedule Performance Index relates to the Physical Work
completed vs. the amount of work planned
SPI = (EV)/(PV)

Using CPI/SPI to calculate your Estimate to Complete


Set at the WBS Level

What is it going to cost to complete this project?


ETC uses one of two formulas
ETC = Remaining Cost of the activity

ETC = Performance Factor*(Budget at Completion Earned


Value Cost)

Performance Factors
4 Optional Methods
PF = 1 *Optimistic Result
ETC = (PF * (Budget at Completion Earned Value Cost
PF = 1/CPI *Most likely Result
ETC = (1/CPI)* Budget at Completion Earned Value Cost
PF = 1/CPI*SPI *Pessimistic Result
ETC = [1/(CPI * SPI)] * Budget at Completion Earned Value Cost
PF = ____
ETC = your custom PF * Budget at Completion Earned Value Cost

Using Remaining Costs for Activities to Calculate (ETC)

Using CPI to Calculate (ETC) Yields an Optimistic Result

PF = 1/CPI *Most likely Result


ETC = (1/CPI)* Budget at Completion Earned Value Cost

Using CPI/SPI to calculate ETC Worst Case Scenario

PF = 1/CPI*SPI *Pessimistic Result


ETC = [1/(CPI * SPI)] * Budget at Completion Earned Value Cost

Key Concepts:
Perform Earned Value Analysis to compare the budgeted cost of the
work to the Actual Cost
Calculate the Planned Value, Earned Value, and Actual Cost to
determine how much work should have been completed, How much
work was completed, and how much the completed work cost to build
Use Estimate to Completion to calculate what the remaining cost of
the activity(s) in progress will be

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