Earned Value Management Explained<\/p>\n
Earned Value Management (EVM) helps project ( help with nursing paper writing from experts with MSN & DNP degrees) managers to measure project ( help with nursing paper writing from experts with MSN & DNP degrees) performance. It is a systematic project ( help with nursing paper writing from experts with MSN & DNP degrees) management process used to find variances in project ( help with nursing paper writing from experts with MSN & DNP degrees)s based on the comparison of worked performed and work planned. EVM is used on the cost and schedule control and can be very useful in project ( help with nursing paper writing from experts with MSN & DNP degrees) forecasting. The project ( help with nursing paper writing from experts with MSN & DNP degrees) baseline is an essential component of EVM and serves as a reference point for all EVM related activities. EVM provides quantitative data for project ( help with nursing paper writing from experts with MSN & DNP degrees) decision making.<\/p>\n
A baseline in project ( help with nursing paper writing from experts with MSN & DNP degrees) management is a clearly defined starting point for your project ( help with nursing paper writing from experts with MSN & DNP degrees) plan. It is a fixed reference point to measure and compare your project ( help with nursing paper writing from experts with MSN & DNP degrees)\u2019s progress against. This allows you to assess the performance of your project ( help with nursing paper writing from experts with MSN & DNP degrees) over time.<\/p>\n
For example, let\u2019s say your project ( help with nursing paper writing from experts with MSN & DNP degrees) is on target to finish in six weeks. Is that good or bad? If your schedule baseline has a four-week completion, you can tell that there is a problem, and your team may need to make adjustments to speed up your progress. A project ( help with nursing paper writing from experts with MSN & DNP degrees) baseline typically has three components: schedule, cost, and scope<\/p>\n
Common abbreviations<\/p>\n
EV = earned value
\nAC = actual cost
\nPV = Planned value
\nBAC= Budget at Completion
\nVAC = Variance at Completion
\nEAC= Estimate at Completion
\nETC = Estimate to complete<\/p>\n
EVM Measures<\/p>\n
EVM consists of the following primary and derived data elements. Each data point value is based on the time or date an EVM measure is performed on the project ( help with nursing paper writing from experts with MSN & DNP degrees).<\/p>\n
Primary Data Points
\n\u2022\tBudget At Completion (BAC)
\nTotal cost of the project ( help with nursing paper writing from experts with MSN & DNP degrees)<\/p>\n
\u2022\tBudgeted Cost for Work Scheduled (BCWS) \/ Planned Value (PV)
\nThe amount expressed in Pounds (or hours) of work to be performed as per the schedule plan
\nPV = BAC * % of planned work.<\/p>\n
\u2022\tBudgeted Cost for Work Performed (BCWP) \/ Earned Value (EV)
\nThe amount expressed in Pounds (or hours) on the actual worked performed
\nEV = BAC * % of Actual work<\/p>\n
\u2022\tActual Cost of Work Performed (ACWP) \/ Actual Cost (AC)
\nThe sum of all costs (in Pounds) actually accrued for a task to date<\/p>\n
Cost Forecasting:
\n\u2022\tEstimate At Completion (EAC)
\nThe expected TOTAL cost required to finish complete work
\nEAC = BAC \/ CPI
\no\t= AC + ETC<\/p>\n
\u2022\tEstimate to complete (ETC)
\nThe expected cost required to finish all the REMAINING work: below ETC is made the subject of the formula to find EAC above
\nETC = EAC – AC<\/p>\n
Reminder
\nEV = earned value
\nAC = actual cost
\nPV = Planned value
\nBAC= Budget at Completion
\nVAC = Variance at Completion
\nEAC= Estimate at Completion)
\nETC = Estimate to complete<\/p>\n
Variances:
\n\u2022\tCost Variances (CV)
\nHow much under or over budget
\nCV = EV-AC
\nNEGATIVE is over budget, POSITIVE is under budget<\/p>\n
\u2022\tSchedule Variances (SV)
\nHow much ahead or behind schedule
\nSV = EV-PV
\nNEGATIVE is behind schedule, POSITIVE is ahead of schedule<\/p>\n
\u2022\tVariance At Completion (VAC)
\nVariance of TOTAL cost of the work and expected cost
\nVAC = BAC – EAC<\/p>\n
Performance Indices:
\n\u2022\tCost Performance Index
\nCPI = EV \/ AC
\nOver (< 1) or under (> 1) budget<\/p>\n
\u2022\tSchedule Performance Index
\nSPI = EV \/ PV
\nAhead (> 1) or behind (< 1) schedule<\/p>\n
To Complete Performance Index (TCPI) is a forecasting technique of Project Management (PM). It is the cost efficiency required to complete a project ( help with nursing paper writing from experts with MSN & DNP degrees) within a defined budget.
\nTCPI = [BAC-EV]
\n [EAC-AC]<\/p>\n
TCPI Definitions
\nIt is a measure of the cost performance that is required to be achieved with the remaining resources in order to meet a specified management goal, expressed as the ratio of the cost to finish the outstanding work to the remaining budget. (PMBOK Guide)<\/p>\n
Difference Between CPI And TCPI<\/p>\n
Both CPI and TCPI provide a measure of Project\u2019s cost efficiency. However there are basic differences between these two figures.
\nCost Performance Index (CPI) is defined as ratio of EV and AC (EV \/ AC). It is project ( help with nursing paper writing from experts with MSN & DNP degrees)\u2019s current cost efficiency on the Control Date.<\/p>\n
The project ( help with nursing paper writing from experts with MSN & DNP degrees) CPI could be any one of the following:
\n\u2022\tCPI < 1 \u2013 it means that value earned value is less than the money spent. Project is over budget.
\n\u2022\tCPI = 1 \u2013 it means that value earned value is equal to the money spent. Project is going as per the budget.
\n\u2022\tCPI > 1 \u2013 it means that value earned value is more than the money spent. Project is under budget.<\/p>\n
CPI is a measure of current cost efficiency of the project ( help with nursing paper writing from experts with MSN & DNP degrees). If CPI \u2265 1, then the project ( help with nursing paper writing from experts with MSN & DNP degrees) is (most probably) doing well. On the other hand, if CPI < 1 then the project ( help with nursing paper writing from experts with MSN & DNP degrees) is likely to be in trouble. In the latter case, the project ( help with nursing paper writing from experts with MSN & DNP degrees) team needs to take a corrective action(s) to bring the future costs in-line with the budget. This can be done by increasing the future cost efficiency.<\/p>\n
As discussed earlier, TCPI is the estimated future cost efficiency.
\nCPI = (monetary value of completed work)\/(expenditure till control date)
\nTCPI = (monetary value of remaining work)\/(remaining funds)<\/p>\n
The main differences between CPI & TCPI\u2026.<\/p>\n
\u2022\tCPI represents project ( help with nursing paper writing from experts with MSN & DNP degrees)\u2019s current cost efficiency, whereas TCPI estimates project ( help with nursing paper writing from experts with MSN & DNP degrees)\u2019s future cost efficiency.
\n\u2022\tCPI is actual efficiency of the completed project ( help with nursing paper writing from experts with MSN & DNP degrees) work, whereas TCPI is estimated forecast of efficiency of the remaining project ( help with nursing paper writing from experts with MSN & DNP degrees) work.<\/p>\n
A.\tYou are managing a software project ( help with nursing paper writing from experts with MSN & DNP degrees) with an initial budget estimate of 2 million dollars. During your interim cost and schedule performance analysis, you figured out that: <\/p>\n
\uf0fc\tYou should have spent $500,000 based on your initial plans and 1,000 man\/days of schedule activities<\/p>\n
\uf0fc\tYou spent $600,000 and completed 1,100 man\/days of schedule activities which should have cost $450,000 based on your initial plans.<\/p>\n
\uf0fc\tYou re-estimated the budget for the remaining work to be done as $1,500,000.<\/p>\n
Calculate the following:
\n\u2022\tBAC (Budget at Completion) = 2 million dollars
\n\u2022\tPV (Planned Value) = $500,000 for cost related EVM calculations, PV=1,000 man\/days for schedule related EVM calculations
\n\u2022\tAC (Actual Cost) = $600,000
\n\u2022\tEV (Earned Value) = 1,100 man\/days for schedule related EVM calculations, EV = $450,000 for cost related EVM calculations.
\n\u2022\tETC (Estimate to Complete) = $1.5 million dollars <\/p>\n
a.\tWhat is the Cost performance index (CPI ) and schedule performance index (SPI) of the project ( help with nursing paper writing from experts with MSN & DNP degrees) respectively?<\/p>\n
\u2022\tCPI = EV\/AC = $450,000\/$600,000 = 0.75
\n\u2022\tSPI = EV\/PV = 1,100\/1,000 = 1.10
\n(4 marks)
\nb.\tWhat is the Cost variance (CV) and schedule variance ( SV) of the project ( help with nursing paper writing from experts with MSN & DNP degrees) respectively?
\n\u2022\tCV = EV – AC = $450,000 – $600,000 = -$150,000
\n\u2022\tSV = EV – PV = 1,100 man\/days – 1,000 man\/days = 100 man\/days
\n(4 marks)
\nc.\tWhat is the Variance at Completion?
\nVAC (Variance at Completion) = BAC – EAC
\n = 2 million dollars – EAC<\/p>\n
We know that EAC (Estimate at Completion) = AC + ETC
\n= $600,000 + $1,500,000
\n= $2,100,000<\/p>\n
Therefore VAC = $2,000,000 – $2,100,000 = -$100,000
\n(4 marks)
\nd.\tWhat is the TCPI based on your new Estimate at Completion value?
\nTCPI based on EAC is calculated as below:
\nTCPI = [BAC-EV] \/ [EAC-AC]
\n \t= [$2,000,000-$450,000] \/ [$2,100,000-$600,000]
\nTCPI (based on EAC) = 1.03
\n(2 marks)
\ne.\tWhat is the status of your project ( help with nursing paper writing from experts with MSN & DNP degrees)?
\nProject is ahead of schedule, over budget, and it is harder to complete the project ( help with nursing paper writing from experts with MSN & DNP degrees) on new EAC
\n(2 marks)
\nWe can calculate
\nCPI = EV \/ AC = 450,000 \/ 600000 =
\nOver (< 1) or under (> 1) budget<\/p>\n
Students\u2019 Problem:
\nEg. A Company has initial budget estimate of 3 million dollars. During your interim cost and schedule performance analysis, it was realized:<\/p>\n
\uf0d8\tYou should have spent $600,000 based on your initial plans and 2,000 man\/days of schedule activities<\/p>\n
\uf0d8\tYou spent $700,000 and completed 2,100 man\/days of schedule activities which should have cost $550,000 based on your initial plans.<\/p>\n
\uf0d8\tYou re-estimated the budget for the remaining work to be done as $2,500,000.<\/p>\n
Therefore:
\n\u2022\tBAC (Budget at Completion) = 3 million dollars
\n\u2022\tPV (Planned Value) = $600,000 for cost related EVM calculations, at PV=2,000 man\/days for schedule related EVM calculations
\n\u2022\tAC (Actual Cost) = $700,000
\n\u2022\tEV (Earned Value) = 2,100 man\/days for schedule related EVM calculations, EV = $550,000 for cost related EVM calculations.
\nETC (Estimate to Complete) = $2.5 million dollars<\/p>\n
Find the following:
\na. What is the CPI and SPI of the project ( help with nursing paper writing from experts with MSN & DNP degrees) respectively?
\nf.\tWhat is the CV and SV of the project ( help with nursing paper writing from experts with MSN & DNP degrees) respectively?
\ng.\tWhat is the Variance at Completion?
\nh.\tWhat is the TCPI based on your new Estimate at Completion value?
\ni.\tWhat is the status of your project ( help with nursing paper writing from experts with MSN & DNP degrees)?<\/p>\n
Reference
\nDwivedi U., (2015). Earned Value Management Explained. Retrieved from
\nhttps:\/\/www.project ( help with nursing paper writing from experts with MSN & DNP degrees)smart.co.uk\/earned-value-management-explained.php<\/p>\n
Malik P., (2020). How To Use To Complete Performance Index (TCPI) Formulas In PMP? Retrieved from https:\/\/www.pmbypm.com\/tcpi-to-complete-performance-index\/<\/p>\n","protected":false},"excerpt":{"rendered":"
Earned Value Management Explained Earned Value Management (EVM) helps project ( help with nursing paper writing from experts with MSN & DNP degrees) managers to\u2026<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7316,7318,7317,7315,7319,7321],"tags":[642,618,8825,576,116,631,19,643,473,633,630,628,450,597,594,626,635,574,622,624,620,621,619,623,617,625,627,634,629,632,644,645,42,66],"class_list":["post-113333","post","type-post","status-publish","format-standard","hentry","category-best-dissertation-writers-uk","category-british-dissertation-writers","category-dissertation-help-online","category-dissertation-writing-services-uk","category-help-with-dissertation-writing","category-uk-dissertation-help","tag-apps-that-write-essays-for-you-free","tag-assignment-writing-services-in-usa","tag-bes","tag-best-dissertation-writing-services","tag-best-essay-writing-service","tag-best-paper-writing-services","tag-best-research-paper-writing-services-in-usa","tag-best-website-to-write-my-essay","tag-cheap-essay-writing-service","tag-cheap-research-paper-writing-service","tag-college-paper-writing-service","tag-dissertation-help-online","tag-dissertation-writing-services","tag-dissertation-writing-services-illegal","tag-dissertation-writing-services-near-me","tag-dissertation-writing-services-usa","tag-essay-writing-service","tag-free-dissertation-writing-services","tag-homework-essay-writer","tag-homework-essay-writer-free","tag-homework-help-global","tag-homework-help-services","tag-homework-help-usa","tag-homework-writing-help","tag-homework-writing-service","tag-legit-research-paper-writing-services","tag-legitimate-dissertation-writing-services","tag-research-paper-writer-online-free","tag-research-paper-writing-services-online","tag-research-paper-writing-websites","tag-write-my-essay-for-me-cheap","tag-write-my-essay-for-me-tik-tok","tag-write-my-essay-free","tag-write-my-paper"],"_links":{"self":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/113333","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/comments?post=113333"}],"version-history":[{"count":0,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/113333\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/media?parent=113333"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/categories?post=113333"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/tags?post=113333"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}