PMP Earned Value Formulas

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 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." 00:12 01:15 Schedule Variance (SV) 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) 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 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 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 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 EAC = AC + [(BAC - EV) / (CPI * SPI)] Assumption: use formula if project is over budget but still needs to meet a schedule deadline. Actual cost to date (AC) plus unearned budget (BAC - EV) modified by both cost performance and schedule performance. Result is a monetary value. Estimate to Complete (ETC) ETC = EAC - AC Expected total cost minus actual cost to date. Result is a monetary value that will tell us how much more the project will cost. Inversion of the same formula from the EAC calculations. Note: This ETC formula is listed in only one (the "most famous") PMP prep workbook. No others list it. We recommend using it, if no keywords are given." Estimate to Complete (ETC) - New Estimate ETC = Bottom-up ETC This is not the result of a calculation or formula, but simply a new estimate of the remaining cost. We create a new estimate when it is thought that the original estimate was flawed. Estimate to Complete (ETC) - Onetime Variance BAC - EV (BAC - EV) will give the unearned project budget. Result is a monetary value. 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 Estimate to Complete (ETC) - Meet Deadline (BAC - EV) / (CPI * SPI) The remaining unearned budget (BAC - EV) modified by both cost performance and schedule performance. Result is a monetary value. Assumption: use formula if project is over budget but still needs to meet a schedule deadline."