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Earned Value Analysis

Earned Value Analysis. Lesson 6. Earned Value Analysis (EVA) Foundations of modern cost control. What’s more important? Knowing where you are on schedule ? Knowing where you are on budget ? Knowing where you are on work accomplished ? Earned Value Analysis (EVA) addresses all three:

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Earned Value Analysis

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  1. Earned Value Analysis Lesson 6

  2. Earned Value Analysis (EVA)Foundations of modern cost control What’s more important? Knowing where you are on schedule? Knowing where you are on budget? Knowing where you are on work accomplished? Earned Value Analysis (EVA) addresses all three: It compares the PLANNED amount of work with what has actually been COMPLETED to determine if COST, SCHEDULE, and WORK ACCOMPLISHED are progressing as planned.

  3. EVA Terminology BCWS – Budgeted Cost of Work Scheduled Planned cost of the total amount of work scheduled to be performed by the milestone date. (a.k.a. your original plan) BCWP – Budgeted Cost of Work Performed The planned (not actual) cost to complete the work that has been done. Also known as “Earned Value” ACWP – Actual Cost of Work Performed Cost incurred to accomplish the work that has been done to date.

  4. Input data for EVA Activity schedule, usually in the form of a bar chart. Budgeted cost for each activity. Percent complete for each activity. Cost to date for each activity. 4

  5. Information Needed to Compute Budgeted Cost of Work Scheduled (BCWS) Activity budget at completion (BAC) Activity schedule Data date Budgeted Cost of Work Performed (BCWP) Activity budget at completion (BAC) Physical activity progress as a percentage of its total work Actual Cost of Work Performed (ACWP) Each activity’s cost to date from the job costing system 5

  6. Monitoring Performance 6

  7. Earned Value Reporting - Costs Budgeted Cost of Work Performed (BCWP) = earned value of project Actual Cost of Work Performed (ACWP) Cost Variance (CV) Differencebetween earned and actual costs for the completed work Cost Performance Index (CPI or CI) CPI = 1, on budget CPI < 1, over budget CPI > 1, under budget

  8. Earned Value Reporting - Schedule Budgeted Cost of Work Performed (BCWP) Budgeted Cost of Work Scheduled (BCWS) Schedule Variance (SV) Difference between the value of work that was planned for completion and the value of the work that was actually completed Schedule Performance Index (SPI or SI) SPI = 1, on schedule SPI < 1, behind schedule SPI > 1, ahead of schedule

  9. Earned Value Reporting (budgeted) (earned) (actual) From: Verzuh (modified)

  10. Earned Value Reporting – Activity A Example From: SBG

  11. Earned Value Reporting – Activity B Example From: SBG

  12. Earned Value Reporting – Activity C Example From: SBG

  13. Earned Value Reporting – Project (Activities A, B, C) Example From: SBG

  14. Earned Value Reporting – Project (Activities A, B, C) Example SI CI From: SBG

  15. Earned Value Reporting – Project (Activities A, B, C) Example Graph shows trend of cost and schedule indices (CI) From: SBG (SI)

  16. Class Exercise: BCWS  Data Date Example: 10,000 x 100% + 112,000 x 25% = 38,000 16

  17. Class Exercise: BCWP  Data Date 17

  18. Class Exercise: ACWP Data Date 18

  19. Class Exercise: SPI and CPI 19

  20. Rolling Up EVA Measures 20

  21. Weekly Review Cycle 21

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