- Planned Value: is the amount we planned to spend up until the current point in time
- Actual Cost: is the amount we spent up to the current point in time
- Earned Value: is the amount we planned to spend on the completed activities.
- Budget at Completion: is the amount we spent when to project is completed
we can use these values to calculate values that indicate project health
Cost Variance = EV - AC indicates the budget surplus or deficit.
- CV > 0 we've earned more value than expected for the cost we incurred; budget surplus
- CV = 0 we've earned as much value as we planned for the cost; budget is on-target
- CV < 0 we've earned less value then expected for the cost we incurred; budget-deficit
Schedule Variance = EV - PV indicates if the project is ahead or behind schedule
- SV > 0 we've earned more value than expected: ahead of schedule
- SV = 0 we've earned the planned value: on-schedule
- SV < 0 we've earned less value than expected: behind-schedule
Cost performance index = EV / AC indicates the health of our budget
- CPI > 1 we've earned more value than expected meaning we're under-budget
- CPI = 1 we've earned as much as we planned meaning we're on-budget
- CPI < 1 we've earned less value than expected meaning we're over-budget.
Schedule performance index = EV / PV indicates the health of our schedule
- SPI > 1 we've earned more value than expected up to this point in time: ahead of schedule
- SPI = 0 we've earned the panned value up to this point in time: on-schedule
- SPI < 1 we've earend less value than expected up to this point in time: behind-schedule
The CPI and SPI can be used to forecast the expected project cost based on our current performance, if the projected cost is within the variance all is well, if it's not then corrective measures must be implemented.
Estimate to complete = (BAC - EV) / CPI how much money is required to complete the project
Estimate at completion = ETC + AC how much money the entire project will cost.
