Key words : Cost, Earned Value Management, Actual Cost, AC, Planned Value, PV, Earned Value, EV, Budget At Completion, BAC, Cost Variance, CV, Schedule Variance, SV, Cost Performance Index, CPI, Schedule Performance Index, SPI, Estimate At Completion, EAC, Estimate To Complete, ETC, To Complete Performance Index, TCPI, Variance At Completion, VAC
Key parameters :
Actual Cost (AC) :
This is how much we have spent so far.
Planned Value (PV) :
This is what we planned for the project.
Earned Value (EV) :
This is how much of the project work has been accomplished.
Budget At Completion (BAC) :
This is the total budget of the project.
Key Performance Variance :
Cost Variance
(CV = EV – AC) :
That means : Am I over budget or under budget ?
Cost Performance Index
(CPI = EV / AC) :
That means :
| CV < 1 | CV = 1 | CV > 1 |
| Over budget | On budget | Under budget |
Schedule Variance
(SV = EV – PV) :
That means : Am I ahead schedule or behind Schedule ?
Schedule Performance Index
(SPI = EV / PV) :
That means :
| CV < 1 | CV = 1 | CV > 1 |
| Behind schedule | On Schedule | Ahead schedule |
Estimate At Completion
(EAC = AC – ETC) :
That means : What will be spent on whole project ?
Performance Variance :
Estimate To Complete
(ETC = BAC – EV) :
That means : What will be spent on remaining project ?
To Complete Performance Index
That means : This index gives you the future cost performance index that you must follow for the remaining work if you want to complete it within the given budget.
(TCPI = (BAC – EV)/(BAC – AC))
(Use this formula if you are under budget)
(TCPI = (BAC – EV)/(EAC – AC))
(Use this formula if you are OVER budget)
Variance At Completion
(VAC = BAC – EAC) :
That means : Variance at total project cost from budget
