Earned Value

Full Answer Section

    Planned value (PV) is the budget for the work that has been scheduled to be completed to date. Schedule variance (SV) is the difference between EV and PV. A positive SV indicates that the project is ahead of schedule, while a negative SV indicates that the project is behind schedule. Cost variance (CV) is the difference between EV and AC. A positive CV indicates that the project is under budget, while a negative CV indicates that the project is over budget. Performance index (PI) is a measure of how well the project is performing. It is calculated by dividing EV by PV. A PI of 1 indicates that the project is on track, while a PI of less than 1 indicates that the project is behind schedule or over budget. To-complete performance index (TCPI) is a measure of how much work needs to be done to complete the project on time and on budget. It is calculated by dividing the remaining EV by the remaining AC. A TCPI of 1 indicates that the project can be completed on time and on budget, while a TCPI of less than 1 indicates that the project is likely to be over budget or behind schedule. Earned value analysis can be used to track project performance and to identify potential problems early on. It can also be used to forecast the likely outcome of the project and to make adjustments as needed. In this portfolio work project, I will be using earned value analysis to assess the performance of the Revive LLC project to develop a new online employee orientation module. The project has a budget of $100,000 and is scheduled to be completed in six months. The project is currently 50% complete and has an EV of $50,000. The AC is $60,000, which results in a CV of -$10,000 and a SV of -$10,000. The PI is 0.50, which indicates that the project is behind schedule and over budget. The TCPI is 0.83, which indicates that the project is likely to be over budget but can still be completed on time. The results of the earned value analysis indicate that the Revive LLC project is not on track to be completed on time or on budget. The project is behind schedule and over budget, and it is likely to remain so. The project manager needs to take corrective action to get the project back on track. Some possible corrective actions include:

• Reducing the scope of the project.
• Increasing the budget for the project.
• Accelerating the schedule for the project.
• Improving the efficiency of the project team.

The project manager needs to carefully consider all of the options and to choose the corrective action that is most likely to be successful. Earned value analysis is a valuable tool for project managers. It can be used to track project performance, identify potential problems early on, and make adjustments as needed. By using earned value analysis, project managers can improve the chances of project success.

Sample Solution

    Earned value analysis (EVM) is a project management technique that is used to measure project performance. EVM compares planned values to actual values to identify variances and to assess the overall health of the project. Earned value (EV) is the value of the work that has been completed to date. It is calculated by multiplying the planned cost of the work by the percentage of work that has been completed. Actual cost (AC) is the actual cost of the work that has been completed to date. It includes the cost of materials, labor, and any other expenses that have been incurred.