Question

Given the following information for a one-year project, answer the following questions. Remember the following terms; planned value (PV), earned value (EV), actual cost (AC), and budget at completion (BAC).

PV    =      $44,000

EV    =      $53,000

AC    =      $45,000

BAC =    $140,000

a).    Use the formulas provided in Table 1, to determine the project’s cost variance, schedule variance, cost performance index (CPI), and schedule performance index (SPI) for the project?

Table 1: Earned Value Formulas

Term	Formula
Earned value	EV = PV to date X% complete
Cost variance	CV = EV – AC
Schedule variance	SV = EV – PV
Cost performance index	CPI = EV / AC
Schedule performance index	SPI = EV / PV
Estimate at completion (EAC)	EAC = BAC / CPI
Estimated time to complete	Original time estimate / SPI

Answer 1

Given, the inputs as follows:

PV    =      $44,000

EV    =      $53,000

AC    =      $45,000

BAC =    $140,000

Cost Variance (CV) = EV - AC

= 53000 - 45000

= 8000

Schedule Variance (SV) = EV - PV

= 53000 - 44000

= 9000

Cost performance index (CPI) = EV/AC

= 53000/45000

= 1.178

Schedule Performance index (SPI) = EV/PV

= 53000/44000

= 1.2045

Cost variance	8000
Schedule variance	9000
Cost performance index	1.178
Schedule performance index	1.2045