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Earned Value Refresher
By Robert Perrine, PMPhttp://www.robertperrine.biz
Copyright reserved
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Copyright, Robert Perrine, PMP
2004 - 2006, Irvine, California, USA. Offered as is, with no warranty regarding the accuracy or
suitability of this material. Copyright reserved. Please, however free to copy and share this document with the following restrictions.
1. You may not charge for use or distribution of this material.
2. Your usage of this material is conditioned upon your compliance with the PMI Code of Ethics.
3. All distributions must be made with the intent to further the collected wisdom of humanity.
4. You may not remove my name or my copyright notices from these documents.
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Overview Basics of EV Work a few quick problems Apply EV to more realistic problems
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Basics of EV
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Basics of EV – EQUATIONSCost Performance Index CPI = EV / AC
Cost Variance CV = EV - AC
Earned Value (for a task) EV = PV * %Complete
Estimate To Complete ETC = EAC - AC
Schedule Performance Index SPI = EV / PV
Schedule Variance SV = EV - PV
Variance At Completion VAC = BAC - EAC
Estimate At Completion (EAC) EAC has a separate set of equations
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Basics of EV –Estimate At Completion
EAC = AC + ETC Re-Estimated
EAC = AC + (BAC - EV) Atypical
EAC = AC + ((BAC - EV) / CPI) Typical
EAC = BAC / CPI Typical
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Basics of EV – Old Vocabulary
ACWP Actual Cost of Work Performed replaced by AC
BCWP Budgeted Cost of Work Performed replaced by EV
BCWS Budgeted Cost of Work Scheduled replaced by PV
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Earned Value Basics of EV Work a few quick problems Apply EV to more realistic problems
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EV Problems – Scenario You are the project manager for a $250,000
upgrade to your company’s internet site. The current project status is shown on next slide. The next board meeting is scheduled for two
months from today. The CEO of your company will demonstrate your
new internet site to the board and to the investors attending that meeting.
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EV Problems – Project Status
Task Description PV EV AC
1.0.0 Operating system $25,000 $23,000 $27,000
2.0.0 Database $90,000 $85,000 $80,000
3.0.0 Web server $10,000 $9,000 $9,000
4.0.0 Firewall $8,000 $8,000 $11,000
5.0.0 Internal testing $10,000 $6,000 $2,000
6.0.0 “Beta” customers $12,000 $1,000 $2,000
7.0.0 Marketing $40,000 $5,000 $4,000
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EV Problems – Question 1 Use the Project Status data, show above.
Which task is on schedule?A) 1.0.0B) 2.0.0C) 3.0.0D) 4.0.0
What is your answer ? Why ?
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EV Problems – Question 1
Task Description PV EV AC
1.0.0 Operating system $25,000 $23,000 $27,000
2.0.0 Database $90,000 $85,000 $80,000
3.0.0 Web server $10,000 $9,000 $9,000
4.0.0 Firewall $8,000 $8,000 $11,000
5.0.0 Internal testing $10,000 $6,000 $2,000
6.0.0 “Beta” customers $12,000 $1,000 $2,000
7.0.0 Marketing $40,000 $5,000 $4,000
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EV Problems – Question 2 You are the project manager for a $250,000 upgrade to
your company’s internet site. The current EV data is shown in Table 1, above. The next board meeting is scheduled for two months from today. The CEO of your company will demonstrate your new internet site to the board and to the investors attending that meeting. Which task has the largest schedule variance? A) 2.0.0B) 5.0.0C) 6.0.0D) 7.0.0
What is your answer ? Why ?
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EV Problems – Question 2
Task Description PV EV SV
1.0.0 Operating system $25,000 $23,000 -2,000
2.0.0 Database $90,000 $85,000 -5,000
3.0.0 Web server $10,000 $9,000 -1,000
4.0.0 Firewall $8,000 $8,000 $0
5.0.0 Internal testing $10,000 $6,000 -4,000
6.0.0 “Beta” customers $12,000 $1,000 -11,000
7.0.0 Marketing $40,000 $5,000 -35,000
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EV Problems – Question 3 Use Table 1, shown above. What is the CPI
on task 7.0.0? A) 1.250B) 0.800C) 8000D) 0.125
What is your answer ? Why ?
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EV Problems – Question 3
Task Description PV EV AC
7.0.0 Marketing $40,000
$5,000 $4,000
CPI = EV / AC = 5,000 / 4,000 = 1.250
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EV Problems – Question 3
Task Description PV EV AC
7.0.0 Marketing $40,000
$5,000 $4,000
CPI = EV / AC = 5,000 / 4,000 = 1.250Is Task 7.0.0 under-budget so far? YES
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EV Problems – Question 3
Task Description PV EV AC
7.0.0 Marketing $40,000
$5,000 $4,000
CPI = EV / AC = 5,000 / 4,000 = 1.250Is Task 7.0.0 under-budget so far? YESIs Task 7.0.0 on-schedule so far?NO, but who asked
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Earned Value Basics of EV Work a few quick problems Apply EV to more realistic problems
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EV Problems – Question 4 You are the project manager for a $250,000 upgrade to
your company’s internet site. The current EV data is shown in Table 1, above. The next board meeting is scheduled for two months from today. The CEO of your company will demonstrate your new internet site to the board and to the investors attending that meeting. The CEO has just called and asked you for the “percent completion” as of today. What is your answer? A) 45% B) 50%C) 55%D) 60%
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EV Problems – Question 4 Analyze the Question
What does “Percent Complete” mean? Hours worked ? Miles of highway, lines of code ?
Basic EV equation EV = PV * (%Complete) Applies to a Task Also applies to the project
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EV Problems – Question 4 Identify a Strategy For a task
EV = PV * (%Complete) %Complete = EV / PV When expressed as a decimal it is SPI.
For a Project %Complete = SUM(EV) / SUM(Project PV)
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EV Problems – Question 4 EV is based upon “A Point in Time”
SPI = EV / PV AT THIS POINT IN TIME
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EV Problems – Question 4 Identify a Strategy For a task
EV = PV * (%Complete) %Complete = EV / PV
For a Project %Complete = SUM(EV) / SUM(Project PV) What is the total PV for a project?
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EV Problems – Question 4 Identify a Strategy For a task
EV = PV * (%Complete) %Complete = EV / PV
For a Project %Complete = SUM(EV) / SUM(Project PV) What is the total PV for a project? BAC
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EV Problems – Question 4 Identify a Strategy For a task
EV = PV * (%Complete) %Complete = EV / PV
For a Project %Complete = SUM(EV) / SUM(Project PV) What is the total PV for a project? BAC What is the BAC for this project ?
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EV Problems – Question 4 Identify a Strategy For a task
EV = PV * (%Complete) %Complete = EV / PV
For a Project %Complete = SUM(EV) / SUM(Project PV) What is the total PV for a project? BAC What is the BAC for this project ? BAC = $250,000
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EV Problems – Question 4 What do we know
%Complete = Sum(EV) / BAC BAC = $250,000
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EV Problems – Question 4 What do we know
%Complete = Sum(EV) / BAC BAC = $250,000
What else do we need to find ?
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EV Problems – Question 4 What do we know
%Complete = Sum(EV) / BAC BAC = $250,000
What else do we need to find ? Sum(EV)
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EV Problems – Question 4 What do we know
%Complete = Sum(EV) / BAC BAC = $250,000
What else do we need to find ? Sum(EV) = $137,000
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EV Problems – Question 4 What do we know
%Complete = Sum(EV) / BAC BAC = $250,000
What else do we need to find ? Sum(EV) = $137,000
What is the ANSWER ?
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EV Problems – Question 4 What do we know
%Complete = Sum(EV) / BAC BAC = $250,000
What else do we need to find ? Sum(EV) = $137,000
What is the ANSWER ? %Complete = 137,000 / 250,000 = 0.548
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EV Problems – Question 4 You are the project manager for a $250,000 upgrade to
your company’s internet site. The current EV data is shown in Table 1, above. The next board meeting is scheduled for two months from today. The CEO of your company will demonstrate your new internet site to the board and to the investors attending that meeting. The CEO has just called and asked you for the “percent completion” as of today. What is your answer? A) 45% B) 50%C) 55%D) 60%
What is your answer ?
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EV Problems – Question 4 You are the project manager for a $250,000 upgrade to
your company’s internet site. The current EV data is shown in Table 1, above. The next board meeting is scheduled for two months from today. The CEO of your company will demonstrate your new internet site to the board and to the investors attending that meeting. The CEO has just called and asked you for the “percent completion” as of today. What is your answer? A) 45% B) 50%C) 55%D) 60%
What is your answer ? C
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Earned Value Basics of EV Work a few quick problems Apply EV to more realistic problems
Here’s another one
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EV Problems – Question 5 You are the project manager for a $250,000 upgrade to
your company’s internet site. The current EV data is shown in Table 1, above. The next board meeting is scheduled for two months from today. The CEO of your company will demonstrate your new internet site to the board and to the investors attending that meeting. The CFO has just called and asked for your revised estimate on the total cost of the project. You review the data and realized that, aside from some hardware price increases initially, the remainder of the project plan is accurate. What is your revised estimated total project cost?A) $252,000 B) $250,000C) $248,000D) $246,350
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EV Problems – Question 5
Analyze the Question What is the EV name for
“revised estimated total project cost”?
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EV Problems – Question 5
Analyze the Question What is the EV name for
“revised estimated total project cost”? EAC “Estimate At Completion”
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EV Problems – Question 5
Analyze the Question What is the EV name for
“revised estimated total project cost”? EAC “Estimate At Completion” What are the formulas for EAC ?
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EV Problems – Question 5 EAC
EAC = AC + ETC Re-Estimated
EAC = AC + (BAC - EV) Atypical
EAC = AC + ((BAC - EV) / CPI) Typical
EAC = BAC / CPI Typical
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EV Problems – Question 5 EAC
EAC = AC + ETC Re-Estimated
EAC = AC + (BAC - EV) Atypical
EAC = AC + ((BAC - EV) / CPI) Typical
EAC = BAC / CPI Typical
Which one fits this problem ? Why ?
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EV Problems – Question 5 EAC
EAC = AC + ETC Re-Estimated
EAC = AC + (BAC - EV) Atypical
EAC = AC + ((BAC - EV) / CPI) Typical
EAC = BAC / CPI Typical
Which one fits this problem ? Why ?
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EV Problems – Question 5 EAC
EAC = AC + ETC Re-Estimated
EAC = AC + (BAC - EV) Atypical
EAC = AC + ((BAC - EV) / CPI) Typical
EAC = BAC / CPI Typical
Which one fits this problem ? Why ?What do we need to find ?
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EV Problems – Question 5 Totals
Task Description PV EV AC
1.0.0 Operating system $25,000 $23,000 $27,000
2.0.0 Database $90,000 $85,000 $80,000
3.0.0 Web server $10,000 $9,000 $9,000
4.0.0 Firewall $8,000 $8,000 $11,000
5.0.0 Internal testing $10,000 $6,000 $2,000
6.0.0 “Beta” customers $12,000 $1,000 $2,000
7.0.0 Marketing $40,000 $5,000 $4,000
SUM 137,000 135,000
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EV Problems – Question 5 Calculate the Answer
EAC = AC + (BAC - EV) = 135,000 + (250,000 – 137,000)
= 135,000 + 113,000 = 248,000
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EV Problems – Question 5 Find Your Answer A) $252,000
B) $250,000C) $248,000D) $246,350
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EV Problems – Question 5 Find Your Answer A) $252,000
B) $250,000C) $248,000D) $246,350
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Earned Value – Summary A few formulas to memorize Know the vocabulary – new and old EAC has a few variations