Project Schedule, Project Cost Analysis and Forecasting

Blog Post By Atul Gaur
Project Schedule and Cost Forecasting

Earned Value Performance measure analyse the project performance by analyzing the project schedule and cost variances along with schedule and cost efficiency. The schedule and cost analysis and forecasting that EVM can perform was explained in my previous post Relationship between EVM performance measures and project management questions. This post describes how to calculate various evm measures? and what do they imply?

Schedule Analysis and Forecasting
EVM Parameter
Project Management Questions   addressed
How to Calculate?
What it implies?
Schedule Variance (SV)
Are we ahead or behind schedule?
SV = EV-PV









SV% = SV/PV
A Positive SV indicates projects is ahead of schedule

A negative SV indicates project is behind schedule

If SV is negative then X% indicates that the project is x% behind schedule.
Schedule Performance Index (SPI)
How efficiently are we using time?
SPI = EV/PV
SPI < 1 indicates behind schedule

SPI = 1 indicates on schedule

SPI > 1 indicates ahead of schedule
Time Estimate At Completion (EACt)
When are we likely to finish work?
EACt = (Original estimated project completion time) / SPI

Indicates estimated project completion time based on current trends




Cost Analysis and Forecasting
EVM Parameter
Project Management Question addressed
How to Calculate?
What it implies?
Cost Variance (CV)
Are we under or over budget?
CV = EV-AC









CV% = CV/EV
A Positive CV indicates cost under run

A negative CV indicates cost overrun

If CV is negative then X% indicates that the project is x% over budget for the work performed till to date
Cost Performance Index (CPI)
How efficiently are we using our resources?
CPI = EV / AC
It implies Rs X worth of work performed for every Re spent

If CPI is greater than 1, under budget

If CPI is less than 1, cost over run.
To Complete Performance Index (TCPI)
How efficiently must we use our remaining resource
TCPI =
(BAC – EV ) / (BAC-AC)
This implies that to achieve the BAC the performance have to improve from current CPI to the calculated TCPI for the remaining work
Estimate At Completion (EAC)
What is the project likely to cost?
EAC = BAC / CPI




EAC = AC + ETC

EAC = (AC/EV) / BAC

EAC =  AC/EV (Work completed & in progress) + (Work not yet begun)

EAC = 
AC+[1/CPI(BAC-EV)]
Indicates the final cost of the project if the current performance trends continue
Variance At Completion (VAC)
Will we be under or over budget?
VAC = BAC – EAC

VAC% = VAC / BAC
If the current trends continue then the project will cost an additional x unit of resources than originally planned
Estimate to Complete (ETC)
What will the remaining work cost?
ETC =
( BAC – EV ) / CPI
Based on efficiency to date measured by CPI an estimate to complete can be worked out
Project Schedule, Project Cost Analysis and Forecasting Project Schedule, Project Cost Analysis and Forecasting Reviewed by Unknown on June 17, 2012 Rating: 5

No comments