Assignment # 6.pdf - Adobe Acrobat Pro (64-bit) 0 X File Edit View E-Sign Window Help Home Tools Assignment # 6.pdf x ? T 1 /4 X A ASSIGNMENT # 6- EARNED VALUE MANAGEMENT Earned value management (EVM) is used to assess the schedule and cost performance of a project - with EVM, the project manager will know exactly whether the project is: ahead of / on / behind schedule under / on / over budget Earned value management (EVM) bases on the concept that i) work completed will deliver value and ii) the value delivered equals the budget put into the work. The value gained can be assessed along the progression of the project. Assume we are building 10 houses, each has a value of $1000 expected to be completed in 10 weeks in proportion. We are 4 weeks in the project. Only 3 houses are completed and $ 4000 spent. Please calculate the following: Pa 1 . Planned Value (PV) - The budgeted value of the work completed so far at a specific date 2. Earned Value (EV) - The actual value of the work completed so far at a specific date 3. Actual Cost (AC) - The total expenditure for the work so far at a specific date 4. Schedule Variance (SV) - difference between PV and EV, to tell whether the project work is ahead of / on / behind schedule 5. Schedule Performance Index (SPI) - ratio between EV and PV, to reflect whether the V project work is ahead of / on / behind schedule in relative terms 6. Cost Variance (CV) - difference between EV and AC, to tell whether the project work is under / on / over budget Type here to search O y! G 70% * 0'C ~ DDX 4:43 PM 12/4/2022Assignment # 6.pdf - Adobe Acrobat Pro (64-bit) 0 X File Edit View E-Sign Window Help Home Tools Assignment # 6.pdf x ? 1 /4 X Assume we are building 10 houses, each has a value of $1000 expected to be completed in 10 weeks in proportion. We are 4 weeks in the project. Only 3 houses are completed and $ 4000 spent. Please calculate the following: 1 . Planned Value (PV) - The budgeted value of the work completed so far at a specific date 2. Earned Value (EV) - The actual value of the work completed so far at a specific date 3. Actual Cost (AC) - The total expenditure for the work so far at a specific date 4. Schedule Variance (SV) - difference between PV and EV, to tell whether the project work is ahead of / on / behind schedule 5 . Schedule Performance Index (SPI) - ratio between EV and PV, to reflect whether the project work is ahead of / on / behind schedule in relative terms 6. Cost Variance (CV) - difference between EV and AC, to tell whether the project work is under / on / over budget 7. Cost Performance Index (CPI) - ratio between EV and AC, to reflect whether the project work is under / on / over budget in relative terms 8. Budget at Completion (BAC) - also known as the project/work budget, that is the total amount of money originally planned to spend on the project/work Pa 9. Estimate at completion (EAC) - as the project goes on, there may be variations into the actual final cost from the planned final cost, EAC is a way to project/estimate the planned cost at project finish based on the currently available data . EAC = BAC/CPI If we believe the project will continue to spend at the same rate up to now V Type here to search G 71% * 0'C ~ D DX 4:44 PM O 36 12/4/2022Assignment # 6.pdf - Adobe Acrobat Pro (64-bit) 0 X File Edit View E-Sign Window Help Home Tools Assignment # 6.pdf x ? T 2 /4 X The delay is caused by reasons which is likely to continue (e.g. labour with less skilled than expected) . EAC = AC + (BAC-EV) If we believe that future expenditures will occur at the original forecasted amount (no more delays of the same kind in future) . The delay might be caused by some unforeseen reasons (e.g. typhoon) which is not likely to happen again . EAC = AC + [(BAC-EV)/(SPI*CPI)] If we believe that both current cost and current schedule performance will impact future cost performance . The performance of the project will continue with sub-prime standards (over budget and behind schedule) This formula is less likely to be used for the PMP Exam 10. Variance at Completion (VAC) - the variance at completion, i.e. the difference between the new estimate at completion and original planned value (Just take the 1st EAC as an example only) 11. To Complete Performance Index (TCPI) - the efficiency needed to finish the project on Pa budget, it is the ratio between budgeted cost of work remaining and money remaining . TCPI = (BAC-EV)/(BAC-AC) Use this equation if the project is required to finish within BAC TCPI = (BAC-EV)/(EAC-AC) Use this equation if the project is required to finish within new EAC V Name (Abbreviation) Formula Interpretation G 4:44 PM Type here to search O 36 71% * 0'C ~ D DX 12/4/2022Assignment # 6.pdf - Adobe Acrobat Pro (64-bit) 0 X File Edit View E-Sign Window Help Home Tools Assignment # 6.pdf x ? T 2 /4 X budget and behind schedule) This formula is less likely to be used for the PMP Exam 10. Variance at Completion (VAC) - the variance at completion, i.e. the difference between the new estimate at completion and original planned value (Just take the 1st EAC as an example only) 11. To Complete Performance Index (TCPI) - the efficiency needed to finish the project on budget, it is the ratio between budgeted cost of work remaining and money remaining . TCPI = (BAC-EV)/(BAC-AC) Use this equation if the project is required to finish within BAC TCPI = (BAC-EV)/(EAC-AC) Use this equation if the project is required to finish within new EAC Name (Abbreviation) Formula Interpretation Schedule SPI = EV/PV 1 behind schedule Performance Index EV = Earned Value =1 on schedule (SPI) PV = Planned Value > 1 ahead of schedule Pa 1 Under budget Index (CPI) AC = Actual Cost sometimes the term 'cumulative CPI V 75% G 4:45 PM Type here to search O y! 36 71% * 0'C ~ D DX 12/4/2022Assignment # 6.pdf - Adobe Acrobat Pro (64-bit) 0 X File Edit View E-Sign Window Help Home Tools Assignment # 6.pdf x ? 3 /4 X Name (Abbreviation) Formula Interpretation would be shown, which actually is the CPI up to that moment SV = EV - PV 0 Behind schedule Schedule Variance (SV) EV = Earned Value =0 On schedule PV = Planned Value >0 Ahead of schedule CV = EV - AC 0 Within budget if the original Estimate at EAC = AC + New ETC estimate is based on Completion (EAC) if AC = Actual Cost wrong original is flawed New ETC = New Estimate to Completion data/assumptions or circumstances have changed Estimate at EAC = AC + BAC - EV the variance is Pa Completion (EAC) if AC = Actual Cost caused by a one-time BAC remains the BAC = Budget at completion event and is not likely to happen same EV = Earned Value again if the CPI would Estimate at remain the same till Completion (EAC) if EAC = BAC/CPI BAC = Budget at completion end of project, i.e. CPI remains the the original V CPI = Cost performance index same estimation is not accurate You may onkr submit content or unload materials where you own the commight or where the comright owner consented to unloading their en 4:46 PM Type here to search O G $36 71% * 0'C ~ D DX 12/4/2022Assignment # 6.pdf - Adobe Acrobat Pro (64-bit) 0 X File Edit View E-Sign Window Help Home Tools Assignment # 6.pdf x ? 3 / 4 X AC = Actual Cost >0 Within budget if the original Estimate at EAC = AC + New ETC estimate is based on Completion (EAC) if AC = Actual Cost wrong original is flawed New ETC = New Estimate to Completion data/assumptions or circumstances have changed the variance is Estimate at EAC = AC + BAC - EV Completion (EAC) if AC = Actual Cost caused by a one-time BAC remains the BAC = Budget at completion event and is not same EV = Earned Value likely to happen again if the CPI would Estimate at EAC = BAC/CPI remain the same till Completion (EAC) if end of project, i.e. CPI remains the BAC = Budget at completion same CPI = Cost performance index the original estimation is not accurate EAC = AC + [(BAC -EV)/(CPI*SPI)] use when the Estimate at AC = Actual Cost question gives all the Completion (EAC) if BAC = Budget at completion values (AC, BAC, EV, substandard EV = Earned Value CPI and SPI), Pa performance CPI = Cost Performance Index otherwise, this continues SPI = Schedule Performance Index formula is not likely to be used To-Complete TCPI = (BAC - EV)/ 1 Under budget Performance Index (BAC - AC) =1 On budget V Type here to search G 4:47 PM O 36 72% * 0'C ~ D DX 12/4/2022Assignment # 6.pdf - Adobe Acrobat Pro (64-bit) 0 X File Edit View E-Sign Window Help Home Tools Assignment # 6.pdf x ? 4 /4 X Name (Abbreviation) Formula Interpretation (TCPI) BAC = Budget at completion >1 Over budget EV = Earned value AC = Actual Cost TCPI = Remaining Work /Remaining Funds BAC = Budget at completion EV = Earned value CPI = Cost performance index ETC = EAC-AC Estimate to EAC = Estimate at Completion Completion AC = Actual Cost VAC = BAC - EAC 0 Under budget Pa V Type here to search O G 4:48 PM 36 9 72% * 0'C ADDX 12/4/2022