Sample Problem: EVM Analysis - Basic Calculation
Example
Problem Statement: At month 6, a project has a Planned Value (PV) or Budgeted Cost of Work Scheduled (BCWS) of $500,000. The Earned Value (EV) or Budgeted Cost of Work Performed (BCWP) is $450,000. The Actual Cost (AC) or Actual Cost of Work Performed (ACWP) is $480,000. Calculate CV, SV, CPI, and SPI.
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Sample Problem: Forecasting Estimate at Completion (EAC)
Example
Problem Statement: Using the data from the previous problem (PV = \500,000EV = $450,000AC = $480,000CPI = 0.94), if the original Budget at Completion (BAC) is \1,000,000, what is the new Estimate at Completion (EAC) assuming the current cost performance will continue for the rest of the project?
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Sample Problem: Forecasting EAC - Atypical Variances
Example
Problem Statement: A project has a BAC of $2,000,000. At the halfway point, AC = \1,100,000EV = $1,000,000. The project manager realizes the \100k overrun was caused by a singular, unrepeatable event (a freak storm that damaged materials). The rest of the work will proceed at the originally budgeted rate. Calculate the new EAC.
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Sample Problem: To-Complete Performance Index (TCPI)
Example
Problem Statement: A project has a BAC = \5,000,000EV = $2,000,000AC = $2,500,000. The owner refuses to increase the budget, so the project must finish within the original \5M BAC. What cost efficiency (TCPI) must the contractor maintain for the remainder of the work to hit this target?
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Key Takeaways
- Indices vs Variances: Variances () provide a dollar amount showing how far off the project is. Indices () provide a ratio showing how efficiently the project is converting money into progress.
- Forecasting Reality: If CPI < 1.0 early in a project, usually increases significantly unless drastic interventions occur.
- TCPI as a Reality Check: A is generally considered unachievable without major structural changes to the project execution plan.