EVM — Terminology & Formulas
Earned Value Management
1. What metric in EVM compares
the value of work completed to
the budgeted cost for that
a/Schedule Performance Index
b/ Cost Performance Index (CPI)
c/ Estimate at Completion (EAC)
d/ Schedule Variance (SV).
2. A project with a CPI of 1.1
a/ The project is behind
b/The project is under budget.
c/ The project is spending less
than planned per unit of work
d/ There is no information about
the project schedule..
Earned Value Management
Integration with Complex Scheduling:
Mega projects often have intricate scheduling with interdependencies between tasks.
Accurately reflecting this complexity in the EVM model can be challenging.
Here are some ways to address these challenges:
Understand the schedule!
Accurate and timely status updates (schedule)
Accurate and timely cost updates
Invest in robust data collection and management systems – automation of processes to
allow for quality time spent with the project team to to review:
progress/status update
understand the impact of the progress update on the schedule
understand and agree the mitigations that are required
Establish clear communication protocols for project changes and baseline updates.
Provide training for project personnel on EVM principles and best practices.
Foster a culture of transparency and accountability in project reporting.
Utilise specialised EVM software to streamline calculations and integrate with scheduling
‘Plan the Plan’ – remember to think ahead when planning the original schedule:
What reports are required?
Does the Schedule software adopted for the project produce sufficient EVM reports?
Does the data need to be exported to another software system to undertake the EVM?
Does the Schedule WBS align with the Cost Breakdown Structure (CBS)?
Do activities with the schedule software require particular coding to ‘communicate’ with
other software packages?
CPM software is great for processing copious amounts of activities and complex
relationships. However, the output generated for review/reporting is dismal. Exporting
data to external packages is now the norm to produce highly visual :
3. What is the main purpose of
Earned Value Management?
a/To track project resources
performance in terms of cost and
c/ To identify and manage
d/ To develop a detailed project
4. Earned Value (EV) is
a/ Actual Cost (AC) + Schedule
b/Planned Value (PV) – Cost
c/The value of work performed
according to the project
d/The total budget allocated to
5. A positive Schedule Variance
a/The project is exceeding its
b/ The project is ahead of
c/ There is a cost overrun on the
d/ The project is experiencing
6. Briefly explain the difference
between Cost Performance
Index (CPI) and Schedule
Performance Index (SPI).
7. Describe two benefits of using
Earned Value Management in
8. A project is at week 10. The Planned Value
(PV) for this point is $50,000, and the Actual
Cost (AC) is $55,000. Calculate the Cost
Variance (CV) and Cost Performance Index
(CPI) for the project.
9. Explain how a project manager can use
Earned Value Management to identify
potential project problems and take