Question

Earned Value Management (EVM) is a project management technique for measuring project performance (schedule, cost mainly) and progress in an objective manner in terms of work achieved (Value): The data identified below was listed in a project’s status report. At time of status report: Planned Value of work (PV) = $70,000 Earned Value of work performed (EV) = $50,000 Actual Cost of work performed (AC) = $75,000 Original Planning: Budgeted cost At Completion (BAC) = $110,000 Original length of the project is 15 months Using the data, calculate the following: a) Expected cost At Completion (EAC). (1 mark) b) Estimate To Complete (ETC). c) The Schedule Variance (SV). d) Discuss how the project is tracking (e.g. ahead or behind schedule, under or over budget)?

Answer 1

PROJECT STATUS REPORT:

its a report which reflects the overall development of a project with the expected project outputs.

its written based on some time period like in months, or span of days etc.

so that the development or progress of each month can be easily identified.

its says about:

• progress
• any kinds of setbacks happened
• future goals
• short period goals to be accomplished.

the main elements that an ideal project report should have are

1.project name

2.project manager name

3.report submission date

4.project summary: where the weekly or monthly goals are listed, then the future goals along with the details about the deliverables are listed

5.project health: showing the health of the project, by finding it using the available data and calculating using some techniques like EAC-expected cost at completion, ETC-estimate to complete, SV-schedule variance etc

• and for easy reporting some colors can be used to display the results (like, on track/in some trouble/ need special care)

6.then the important dates for completion of tasks can be marked.

7.risks identified for each task which was planned to be done or of which were completed can be shown

8.the team progress can be stated

NOTE:these are the main points to be considered while writing the project status report. The data given on the question can be listed under section 5 PROJECT HEALTH.

these all data can be added into different tables for easy understanding of the report.

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given Planned Value of work (PV) = $70,000

Earned Value of work performed (EV) = $50,000

Actual Cost of work performed (AC) = $75,000

Original Planning: Budgeted cost At Completion (BAC) = $110,000

Original length of the project is 15 months

a) EAC = expected cost at completion

EAC= budgeted cost at completionBAC / cost performance index CPI

where CPI= earned value EV/ actual cost AC

substituting the given values into the equation we get,

CPI = $50,000/ $75,000 = 0.67

EAC= $110,000/ 0.67= $ 164,179.10 = $164,179

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b)ETC= EAC- AC

substituting the given values we get,

ETC= $164,179 - $75,000 = $89,179

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c)SV,schedule variance = earned value EV- planned value PV

substituting the given values we get,

SV= $50,000 - $70,000 = - $ 20,000

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d) PROJECT TRACKING:

SV or schedule variance is used to say whether the project is behind or ahead the schedule,

if SV value is negative, project is behind the schedule.

if its positive the project is ahead.

here the SV value is negative so, the project is BEHIND the schedule.

to say about the budget of project whether its UNDER or OVER budget, we have to calculate a new value CV,

Cost variance CV= EV-AC

substituting the given values we get,

CV= $50,000 -  $75,000 = - $25,000

if the value is NEGATIVE, then project is over budget

else if its POSITIVE, project is under budget.

so here its negative, so the project is over budget.