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The document discusses a project to make 10 chairs in 10 days with a $1000 budget. By day 5, 4 chairs were completed using $600, behind schedule and over budget. Formulas are provided for calculating schedule variance, cost variance, schedule performance index, cost performance index, and forecasting estimates to completion and estimate at completion based on actual costs and variances.

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Revathi J
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18 views2 pages

Earned Value

The document discusses a project to make 10 chairs in 10 days with a $1000 budget. By day 5, 4 chairs were completed using $600, behind schedule and over budget. Formulas are provided for calculating schedule variance, cost variance, schedule performance index, cost performance index, and forecasting estimates to completion and estimate at completion based on actual costs and variances.

Uploaded by

Revathi J
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Project A

Make 10 unique chairs in 10 days with 1000 $

At the end of the 5 th day

How many chairs you SHOULD have completed? 5

How much money you SHOULD have used ? 500

How many chairs did you ACTUALLY complete? 4

How much money SHOULD have been used in completing 4 chairs ? 400

How much money did you ACTUALLY use? 600

Behind Schedule by 100$

Over budget by 200$

Planned Cost of planned work / Budgeted cost of work Scheduled (BCWS) / Planned Value (PV) 500

Planned cost of actual work / Budgeted cost of work performed (BCWP) / EARNED VALUE (EV) 400

Actual cost of actual work / Actual cost of work performed (ACWP) / Actual cost (AC) 600

Schedule Variance (SV) = EV – PV

Cost variance (CV) = EV – AC

Schedule Performance Index (SPI) = EV / PV

Cost Performance Index (CPI) = EV /AC

SPI = 1 on schedule CPI = 1 On budget

SPI <1 behind Schedule CPI <1 over budget

SPI > 1 Ahead schedule CPI > 1 under budget

CPI=.67

SPi = .8

SPI = .8 (80/100 or 80 dollars worth of work completed when we should have completed 100 dollars
worth of work ; in other words we are running behind by 20%)

CPI = .67 (67/100 or 67 dollars worth of work completed by spending 100 dollars hence we are
overbudget by 33$ or 50% of the original budget ie 67)

If you want to find the % overbudget use 1/CPI and the decimal digits will represent % over run in cost)
Forecasting

Typical Variance (uncontrollable)


600 + 900 = 1500
AC + Estimate To Completion (ETC) = Estimate AT completion (EAC)

A-typical Variance (Controllable)


600 + 600 = 1200

AC + ETC = EAC

ETC = BAC – EV (Controllable)

ETC = (BAC – EV) / CPI (Uncontrollable)

EAC = AC + (BAC-EV) / CPI --------------------------Uncontrollable

EAC = BAC / CPI --------------------------Uncontrollable


ETC = EAC – AC --------------------------Uncontrollable

EAC = AC + (BAC – EV) -------------------------------Controllable


ETC = BAC – EV -------------------------------Controllable

Variance at completion (VAC)


VAC = BAC - EAC

Future CPI = To Complete Performance Index

TCPI = Remaining work / remaining money

TCPI = (BAC – EV) / (BAC – AC)

Or

TCPI = (BAC – EV) / (EAC – AC)


TCPI > 1.15~1.20 (Impossible to achieve)

Original Duration / SPI = New Duration

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