Earned Value – Cost Engineering – Part I.

Page 1
1 Earned Value (EV) - Definition 3 Earned Value Management (EVM) - Definition
Measure of the value of work performed so far, also called the
budgeted cost of work performed (BCWP). The “value” of the work A project progress control system that integrates work scope,
earned at the date of analysis (data date).1 schedule, and resources to enable objective comparison of the earned
1- AACE International
value to the actual cost and the planned schedule of the project.1
2 Example 01 1- AACE International
Scope: To build 6 houses 4 EVM Terms
Deadline: 6 months.
System Description Meaning
Budget per house : $ 10,000 Terms

Project Budget : $ 60,000 BCWS Budgeted Cost for Work

or Scheduled or What is planned to
PV Planned Value be done

BCWP Budgeted Cost for Work

Month 1 2 3 4 5 6
or Performed or What was done
EV Earned Value
After three months, two houses were built.
The Earned Value is ACWP Actual Cost of Work
EV = 10,000 + 10,000 = $ 20,000. or Performed or The cost incurred
EV = $ 20,000 AC Actual Cost
 Earned Value – Cost Engineering – Part I .Page 2
5 Formula 7
Graph Analysis 9 Example 02
Schedule
Earned Value (EV) = % complete x budget Data
for that account $ Delay
Assessment date: Jun-20
Schedule Variance (SV) = EV – PV
% Complete = 31%
Schedule Performance Index (SPI) = EV / PV Budget = $ 24.2 per %
Cost Variance (CV) = EV – AC AC = $ 1,228
Activity is faster
Cost Performance Index (CPI) = EV / AC than planned PV = $ 1,000

6 Graph Analysis 8 Graph – Example 02 Analysis

Cost $
EV = 31% * 24.2 = $ 750
2500
PV AC EV
The activity/project 2000 SV = 750 – 1000 = -250
$ is below the SPI = 750 / 1000 = 0,75
planned cost. 1500 Assessment date

1000
CV = 750 – 1228 = - 478
SV CV
500
CPI = 750 / 1228 = 0,61

The cost is higher 0 The activity is delayed, and

than expected.
the cost is being overrun.
Time