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Earned Value Analysis for Project Management

The document discusses earned value analysis metrics for two project examples. For the first project, the metrics calculated at the end of the second day include BCWS of R250, BCWP of R170, ACWP of R200, SV of -R80 and CPI of 0.85. For the second project, metrics calculated at week 3 include BCWS of R7,500, BCWP of R5,000, ACWP of R9,000, CV of -R4,000 and SV of -R2,500. The project is behind schedule and over budget, so the manager may reduce scope, extend schedule, obtain more funding or use overtime.

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Nobukho Njenje
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13 views2 pages

Earned Value Analysis for Project Management

The document discusses earned value analysis metrics for two project examples. For the first project, the metrics calculated at the end of the second day include BCWS of R250, BCWP of R170, ACWP of R200, SV of -R80 and CPI of 0.85. For the second project, metrics calculated at week 3 include BCWS of R7,500, BCWP of R5,000, ACWP of R9,000, CV of -R4,000 and SV of -R2,500. The project is behind schedule and over budget, so the manager may reduce scope, extend schedule, obtain more funding or use overtime.

Uploaded by

Nobukho Njenje
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd

Earned Value Solution

A project is one week long (Mon-Fri) and has four tasks, A, B, C and D. The tasks were initially estimated to
cost R 50, R100, R200 and R100 respectively. However, by end of Tuesday, Task A is 100% complete, task B
is 80 % complete and C is 20 % complete. (see Gantt Chart below).

Day Mon Tue Wed Thur Fri Budget % Actual


For Complete Cost by
whole by Tuesday
Task Task/R Tuesday
A 50 100 60
B 100 80 110
C 200 20 30
D 100 0 0

Determine the following metrics by end of business, Tuesday:

a) BCWS (PV) = [50 + 100 +100] =250 [2]


b) BCWP (EV) = (50+80%*100+20%200) = 170 [2]
c) ACWP (AV) = (60+110+30) =200 [2]
d) SV, comment on this value=BCWP-BCWS= (170-250) =-80, project is behind
schedule. [3]
e) CV, comment on this value=BCWP-ACWP=170-200= -30, project is overspent. [3]
f) SPI, comment on this value=BCWP/BCWS=170/250=0.68; Only 68% of work has
been done. [3]
g) CPI, comment on this value=BCWP/ACWP=170/200=0.85 money is being spent
at an efficiency rate of 85%. [3]

1
Earned Value Solution

Assume a small four-week software enhancement project is budgeted for R10,000. While
reporting status during the third week, the project manager determines his team has only
completed 50 percent of the work. The project manager also noticed they've spend R9,000 to
date on the project. Determine the following metrics:

1.1BCWS = [1]

PV = Planned % Complete * Project Budget = 75% * R10,000 = R7,500(1)

1.2 BCWP = [1]

EV = Actual % Complete * Project Budget = 50% * R10,000 = R5,000. (1)

1.3 ACWP = [1]

AC = R9, 000(1)

1.4 CV (comment on this value) = [2]

CV = EV – AC

The cost variance for this project is R5, 000 - R9, 000 = -R4, 000. (1) The project has negative
cost variances and will be over budget at the end of the project. (1)

1.5 SV (comment on this value) = [2]

SV = EV – PV

The schedule variance for this project is R, 5000 - R7, 500 = -R2, 500. (1)
The project has negative schedule variance. The project is behind schedule (1)

1.6 Given the above scenario as highlighted by CV and SV, what would be the best
possible course of action for the project manager? [3]

The project is behind schedule and will be over budget at the end of the project. The project
manager will likely need to
 reduce scope, (1)
 extend the project schedule or (1)
 obtain more funding to deliver the original software enhancement. (1) or
 overtime(1)

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