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EARNED VALUE
MANAGEMENT (EVM)
1
These three elements form the basis for the earned value
reporting system.
EQUIVALENT TERMS
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Project tracking
without EVM
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Question
What are the BCWS, ACWP, and BCWP (PV, AC, and EV)?
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Answer
BCWS is $500,000.
ACWP is $486,000.
BCWP is $480,000.
From these figures we can see that the accomplishments of the project as
of today are somewhat less than what was planned for. This is the
difference between the earned value and the planned value to date. The
planned value is the BCWS and the earned value is the BCWP. This means
that we are $20,000 behind schedule.
We can also see that the actual cost is $14,000 less than the planned
expenditures to date. This means that we are somewhat under budget.
Unfortunately we are $14,000 under budget but also $20,000 behind
schedule. If we add the $20,000 of work that should have been completed
but was not, we find ourselves projecting a $6,000 over budget condition. It
could be that things are actually worse than they appear at first glance. If
the performance to date continues, the amount over budget will probably
be even higher at the end of the project. This is usually considered a bad
situation.
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Indices:
CPI=(BCWP/ ACWP)
Cost Performance Index=(Earned/ Actual)
Cost variance related as a ratio instead of a dollar amount.
A ratio less than 1.0 indicates that the value of the work that has been
accomplished is less than the amount of money spent.
SPI=(BCWP/ BCWS)
Schedule Performance Index=(Earned/Planned)
Schedule variance related as a ratio instead of a dollar amount.
A ratio less than 1.0 indicates that work is being completed slower than
planned.
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In the schedule below, Project A has a CPI greater than 1.00. This
shows us that the project has been earning value faster than it has
been accruing costs.
However, Project A also has a SPI value that is less than 1.00.
Although Actual Costs are low, Task 1 is behind schedule, so the
project has not earned as much value as was planned.
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Forecasting
BAC=Original project estimate (Budget at completion)
ETC=[(BAC-BCWP)/CPI] Estimate to complete
EAC=(ACWP + ETC) Estimate at completion
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EXAMPLE 1 (Q)
EXAMPLE 1 (A)
Cost and schedule deviations:
Cost variance, CV=BCWP-ACWP
= RM7, 600-RM7, 700
= -RM 100
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EXAMPLE 1 (A)
Schedule variance, SV
=BCWP-BCWS
= RM7, 600-RM7, 600
=0
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EXAMPLE 1 (A)
Cost and schedule performance:
Cost Performance Index, CPI=(BCWP/ACWP)
= (RM7, 600/RM7, 700)
= 0.987
The CPI is less than 1.0, which indicates a poor cost
performance. The earned value is less than the actual costs.
Schedule Performance Index, SPI=(BCWP/ BCWS)
= (RM7, 600/ RM7, 600)
= 1.0
The SPI equals to 1.0, which indicates the schedule performance
is progressing precisely as planned.
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EXAMPLE 1 (A)
Forecasting cost at completion
Estimate to complete, ETC=[(BAC-BCWP)/ CPI]
= [(147, 500-7, 600)/0.987]
= RM141, 743
Based on the analysis of the statues report, the remaining cost
to complete the project is RM141, 743.
Estimate at completion, EAC=ACWP + ETC
= 7, 700 + 141, 743
= RM 149, 443
Based on the analysis of the status report, the estimated cost
of the project at completion is RM149, 443, which is RM1,
943 over the original budget of RM147, 500.
Check EAC = 147,500/0.987 = BAC / CPI = 149,443 (Scenario 1
previous variances are expected to continue for the rest of the project)
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Scenario 1--variances will be present in the future, current variances are typical
current variances will be continue to be present in the future; extrapolate the trend
through to the end of the project.
ETC1 = (BAC - EV) / CPI
EAC = AC + ETC1 (Actual to date plus remaining budget modified by performance)
Scenario 2--past estimated assumptions are not valid, past estimate was
fundamentally flawed
we convince that original estimate is so far off, the past assumptions are not valid,
variances are neither isolated or clear trends, thus fresh estimates are needed. It is often
applicable when schedule acceleration are such as crashing or fast-tracking are used.
ETC2 = New estimate for the remaining work
EAC = AC + ETC2
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Either method is personal judgment call based upon their understanding of the project
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BCWS
ACWP
% of BCWS (BQ)
BCWP
17,280
7,200
7,200
7,200
5,400
1,440
3,600
5,400
7,200
7,200
7,200
7,200
3,600
1,440
5,450
3,200
2,500
99,710
16,470
7,470
7,290
7,290
3,960
810
4,050
4,320
5,670
3,240
7,830
7,110
3,960
810
0
0
0
80,280
100
100
100
100
100
100
100
100
100
100
75
50
20
0
0
0
0
79
17,280
7,200
7,200
7,200
5,400
1,440
3,600
5,400
7,200
7,200
5,400
3,600
720
0
0
0
0
78,840
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Q2
Base on the S-Curve of BCWS, BWCP and ACWP. Identify the following elements on week
3, Week 4 and week 8. Comment on the data. Remember that they are cumulative
data.
1)BCWS
2)BCWP
3)ACWP
4)CV
5)SV
6)CPI
7)SPI
8)CV%
9)SV%
10)CSI
13)BAC
14)ETC (Estimate to complete) = (BAC BCWP) / CPI. (scenario 1)
15)EAC (Estimate at completion)
16)VAC (Variance At Completion)
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Q2
Week
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
BCWS/PV
0
1,000
2,500
4,500
6,000
10,000
14,000
23,000
30,000
38,000
48,000
60,000
72,000
86,000
101,000
120,000
156,000
171,300
175,500
182,000
185,000
BCWP/EV
0
1,500
3,000
5,600
7,500
13,000
17,000
20,000
28,000
35,000
45,000
53,000
68,500
88,000
105,000
125,000
150,000
165,000
172,000
183,000
185,000
ACWP/AC
0
1,800
3,500
6,000
7,000
11,320
15,500
25,450
32,150
43,160
46,670
55,660
70,000
82,500
95,000
117,500
140,000
154,000
168,000
186,000
190,000
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Example Q2
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Example Q2
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Example Q2
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Example Q2
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Example Q2
Base on the S-Curve of BCWS, BWCP and ACWP. Identify the following elements on week
3, Week 4 and week 8. Comment on the data. Remember that they are cumulative data.
1)BCWS
week 3
week4
week8
1)BCWP
1)ACWP
1)CV
1)SV
1)CPI
1)SPI
1)CV%
1)SV%
1)CSI
13)BAC
13)ETC
13)EAC
13)VAC
1)
2)
3)
comment :
43
1)BCWS
2)BCWP
3)ACWP
4)CV
5)SV
6)CPI
7)SPI
8)CV%
9)SV%
10)CSI
13)BAC
14)ETC
15)EAC
16)VAC
comment :
1)
2)
3)
week 3
2,000
2,600
2,500
100
600
week4
1,500
1,900
1,000
900
400
week8
7,000
8,000
6,700
1,300
1,000
1.04
1.90
1.19
1.30
1.27
1.14
3.85
30.00
1.35
185,000
175384.62
47.37
26.67
2.41
185,000
96368.42
16.25
14.29
1.36
185,000
148237.50
177,884.62
97,368.42
154,937.50
7,115.38
87,631.58
30,062.50
CPI>1, COST
PROJECT IS UNDER
BUDGET
SPI >1, PROJECT IS AHEAD OF
SCHEDULE
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Some example
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On Day X:
Cost (Person-Hours)
i ng
d
n
pe
S
al
u
t
Ac
Today
g
d in
n
e
Sp
)
ed
n
n
Pla
(
d
e te
g
d
Bu
Planned Value:
Value what your
plan called for sending on the
tasks planned to be completed
by this date.
lue
a
V
ed
n
r
Ea
Earned Value:
Value value (cost)
of what you have
accomplished to date, per the
base plan.
Time (Date)
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Cost (Person-Hours)
)
ed
n
n
Pla
(
d
e te
g
d
Bu
Over
Budget
i ng
d
n
pe
S
al
u
t
Ac
lue
a
V
ed
n
r
Ea
g
d in
n
e
Sp
Behind
Schedule
Time (Date)
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On Day X:
Therefore: