3.4.3 Earned Value Management (EVM) Basics

EVM provides an objective measure of project performance by integrating scope, schedule, and cost.

• Purpose: Objective measure integrating scope, schedule, cost.
• Core Metrics: PV (Planned Value - Budgeted Cost of Work Scheduled), EV (Earned Value - Budgeted Cost of Work Performed), AC (Actual Cost - Actual Cost of Work Performed).
• Key Calcs: Cost Variance (CV) = EV - AC (Negative = over budget); Schedule Variance (SV) = EV - PV (Negative = behind schedule); Cost Performance Index (CPI) = EV / AC (<1 = cost inefficient); Schedule Performance Index (SPI) = EV / PV (<1 = time inefficient).
• Forecasts: Estimate At Completion (EAC) ≈ BAC / CPI (Forecast total cost); Estimate To Complete (ETC) = EAC - AC (Forecast remaining cost); Variance At Completion (VAC) = BAC - EAC (Forecast final budget variance).
• Interpretation: Variances show deviation; Indices show efficiency; EAC forecasts likely final cost.