Cost Variance (CV)
EV - AC
Provides cost performance of the project. Helps determine if the project is proceeding as planned.
Negative = over budget = bad Positive = under budget = good"
Cost Performance Index (CPI)
EV / AC
Measure of cost efficiency on a project. Ratio of earned value to...
PMP Earned Value Formulas
Cost Variance (CV) - Answer EV - AC
Provides cost performance of the project. Helps determine if the project is proceeding
as planned.
Negative = over budget = bad Positive = under budget = good"
Cost Performance Index (CPI) - Answer EV / AC
Measure of cost efficiency on a project. Ratio of earned value to actual cost.
1 = good. We are getting $1 for every $1 spent. Funds are used as planned.
>1 = good. We are getting >$1 for every $1 spent. Funds are used better than planned.
<1 = bad. We are getting <$1 for every $1 spent. Funds are not used as planned."
Schedule Variance (SV) - Answer EV - PV
Provides schedule performance of the project. Helps determine if the project work is
proceeding as planned. Negative = behind schedule = bad Positive = ahead of schedule
= good
Schedule Performance Index (SPI) - Answer EV / PV
Measure of schedule efficiency on a project. Ratio of earned value to planned value.
Used to determine if a project is behind, on or ahead of schedule. Can be used to help
predict when a project will be completed.
1 = good. We are progressing at the originally planned rate.
>1 = good. We are progressing at a faster rate than originally planned.
<1 = bad. We are progressing at a slower rate than originally planned."
Estimate at Completion (EAC) - Same rate of variance - Answer BAC / CPI
Assumption: use formula if current variances will probably remain the same through the
end of the project. This is the formula most often required on the exam.
Original budget modified by the cost performance. The result is a monetary value."
Estimate at Completion (EAC) - New Estimate - Answer AC + Bottom-up ETC
Assumption: use formula if original estimate was fundamentally flawed or conditions
have changed and invalidated original estimating assumptions.
Actual Cost plus a new estimate for the remaining work. Result is a monetary value."
Estimate at Completion (EAC) - Onetime Variance - Answer AC + (BAC - EV)
Assumption: use formula if current variances will probably not occur again through the
end of the project, which means the original budget is more reliable.Actual cost to date
(AC) plus unearned budget (BAC - EV). Result is a monetary value."
Estimate at Completion (EAC) - Meet Deadline - Answer EAC = AC + [(BAC - EV) / (CPI
* SPI)]
Assumption: use formula if project is over budget but still needs to meet a schedule
deadline.
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