Question

Build an Earned Value Management (EVM) model using these variables:

Planned Value: $45,000

i.Note for understanding, this based on time, and what we expected to use based on time.  Your schedule variance is based on earned and planned.

Actual Cost: $39,500

Earned Value (how much has been spent based on planned costs) : $43,500

i.Note for understanding, this usually based on expected costs at the task level.  In other words, for the tasks complete the project was expected to use this much costs. Your cost variance is based on actual and earned.

Balance at Completion: $172,000

Original Time in Months: 14

Calculate in the model:

Cost Variance

Schedule Variance

Cost Performance Index

Schedule Performance Index

Estimate at Completion

Estimated Time

Use conditional formatting to render any “bad” values red, “good” values green and “0” values yellow.  Do cell by Cell.

Analyze the data and denote your evaluation of the project.  Include in the evaluation comments on schedule, costs, and performance

Answer 1

Amount in USD ($)
Planned Value? (PV)	45000
Earned Value? (EV)	43500
Actual Cost? (AC)	39500
Budget at Completion (BAC)	172000
1. Cost Variance (CV) = EV - AC = 43500-39500	4000	As Cost Variance is positive, this means we are under budget.
2. Schedule Variance (SV) = EV - PV = 43500 - 45000	(1500)	As Schedule Variance is negative, this means we are behind schedule.
3. Cost Performance Index(CPI) = EV/AC = 43500/39500	1.10	AS the CPI is greater than one, we are earning more than the amount spent. In other words, we are under budget.
4. Schedule Performance Index (SPI) = EV/PV = 43500/45000	0.97	As the SPI is less than one, this means less work has been completed than the planned work. In other words, we are behind schedule.
5. Estimate at Completion = BAC/CPI = 172000/1.10	156183.91	if the project continues to progress with CPI = 1.10 until the end, we will have to spend 156183.91 USD to complete the project.