Earned value management (EVM)
Earned value management (EVM) calculation for a project:
Example: The project has 1 task. Total hours planned to do the project: 5 hours. Number of hours spent: 6 hours. Estimate to complete the project: 7 hours. Hourly rate: USD 50 per hour.
Planned value (PV) = How much work should be done? PV = Total hours planned x hourly rate. PV = 5 hours x USD 50 = USD 250. Earned value (EV) = How much work was done? EV = Planned value × percent that project is completed. EV = USD 250 × 6/7 complete = USD 214. Actual cost (AC) = How much did the work cost? AC = Total hours spent x hourly rate. AC = 6 hours x USD 50 = USD 300.
Value 350 Planned value (PV)
Actual cost (AC)
300 250 200 Earned value (EV)
6
7
Hours
Schedule performance index (SPI) = Earned value (EV) ⁄ Planned value (PV) SPI = USD 214 / USD 250 = 0.86.
Schedule variance (SV): Earned value (EV) – Planned value (PV) SV = USD 214 – USD 250 = -USD 36. Cost performance index (CPI): Earned value (EV) / Actual cost (AC) CPI = USD 214 / USD 300 = 0.71. Cost variance (CV) = Earned value (EV) - Actual cost (AC) CV = USD 214 – USD 300 = -USD 86.
Sources of inspiration https://edward-designer.com/web/pmp-earned-value-questions-explanined/ https://www.pmi.org/learning/library/earned-value-management-systems-analysis-8026