Earned Value Formulas

Now that you have gone through the Earned Value Terms. Lets look at the formulas involved in calculating the Earned Value. Here again, all the formulas are listed in the slide along with their explanation. Remember to note that Negative cost variance means that the project is over budget, positive means the project is under budget. Similarly, Negative schedule variance means that project is behind schedule where as Positive schedule variance means that project is ahead of schedule. The next two parameters ie Cost Performance Index (CPI) and Schedule Performance Index (SPI) are also quiet important parameters. Their value varies between 0 and 1. So, if CPI is say 0.8, it means that we are getting 80 cent out of every dollar spent in the Project. If, SPI is say 0.9, it means that project is progressing at only 90% of the speed originally planned. The next parameter is Estimate At Completion. So, at any point of time during the project execution, if it is required to know how much the project would actually cost by the time its gets completed, just divide the Budget At Completion by the Cost Performance Index. What is Budget AT Completion? Its just the Budget of the Total Project. The next parameter is Estimate to Complete, which is how much more would the project cost from this point onwards. This is calculated simply by subtracting Actual Cost from the Estimate at Completion. Also, Variance at Completion can be calculated by subtracting Estimate At Completion from the …