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Project Management - Cost Control

The document discusses Earned Value Management (EVM), which integrates scope, schedule, and cost baselines to measure project performance. EVM uses formulas like Cost Variance, Schedule Variance, Cost Performance Index, and Schedule Performance Index to analyze current and predicted project performance in dollars or percentages by comparing Earned Value, Actual Cost, and Planned Value. These formulas can identify if a project is over/under budget or ahead of/behind schedule.

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AhmedKhaledSalah
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356 views3 pages

Project Management - Cost Control

The document discusses Earned Value Management (EVM), which integrates scope, schedule, and cost baselines to measure project performance. EVM uses formulas like Cost Variance, Schedule Variance, Cost Performance Index, and Schedule Performance Index to analyze current and predicted project performance in dollars or percentages by comparing Earned Value, Actual Cost, and Planned Value. These formulas can identify if a project is over/under budget or ahead of/behind schedule.

Uploaded by

AhmedKhaledSalah
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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EARNED VALUE FORMULAS “Simplified”

• Earned Value Management Is a project management methodology used to track project


performance as well as forecast future performance.
• EVM integrates the scope baseline, schedule baseline and cost to provide performance
measurements (PMB).
• Results can be expressed in dollars and/or percentage.
• EVM can be used to report current/past project performance, and predict future project
performance based on current/past performance.
• EVM can be used Variance Analysis Forecasting Current/Past Performance Future Performance

CV SV CPI SPI
Cost Performance Index Schedule Performance
Cost Variance Schedule Variance
Index

EV – AC EV – PV EV / AC EV / PV
Where: Where: Where: Where:
EV = Earned Value EV = Earned Value EV = Earned Value EV = Earned Value
AC = Actual Cost PV = Planned Value AC = Actual Cost PV = Planned Value
EARNED VALUE FORMULAS “Simplified”

CV - Cost Variance • EV – AC

EV – AC • The difference between Earned Value and Actual Cost

Negative • Cost Overrun or over budget

Positive • Under Budget

Zero • On Budget

CPI - Cost Performance Index • EV /AC


EV/AC • The ratio of Earned Value to Actual Cost
Value < 1 • Project performance Over Budget
Value > 1 • Project performance Under Budget
Value= 1 • Project Performance On Budget
EARNED VALUE FORMULAS “Simplified”

SV - Schedule Variance • EV – PV

EV – PV • The difference between Earned Value and Planned Value

Negative • Project performance behind schedule

Positive • Project performance ahead schedule

Zero • Project Performance on schedule

SPI - Cost Performance Index • EV /PV

EV/PV • The ratio of Earned Value to Planned Value

Value < 1 • Project performance behind schedule

Value > 1 • Project performance ahead schedule

Value= 1 • Project Performance on schedule

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