- Project Management Terms
- Agile - The Definition of Continuous Change
- Servant Leadership - A Key Leadership Style in Agile
- 6 Steps to making reasonable decisions
- What is the BOSCARD method
- PEST Analysis: How Political, Economic, Social, and Technological Factors Impact Your Business
- 49 Processes in Project Management
- What is Aggregate Planning in Project Management?
- 25 PMP Formulas you must remember to pass the PMP exam
- Example with formulas Earned Value, Cost Variance and Schedule Variance
- Example with formular Cost Performance Index (CPI), Schedule Performance Index (SPI) and Estimate at Completion (EAC)
- Example with formulas Beta Value in PERT, Expected Monetary Value (EMV) and Risk Priority Number
- Example with formular Variance at Completion, Estimate to Complete (ETC) and To Complete Performance Index (TCPI)
- Example with formular Standard Deviation, Communication Channels and Cost plus Percentage of Cost
- Example with formular Cost plus Fixed Fee, Cost plus Award Fee and Cost plus Incentive Fee
- Example with formular Return on Investment (ROI), Payback Period and Cost Benefit Ratio
- Example with formular Present Value (PV), Future Value (FV), Target Price and Point of Total Assumption
- Kanban Board - Agile Project Chart
- Gantt Chart - Roadmap Project Chart
- What is a Timeline View in Project Management?
- PERT Chart - The Most Popular Project Management Diagram
- Work-Breakdown Structure (WBS) Chart
- Flowchart in Project Management
- Cause-Effect Project Charts - Fishbone Diagram
- Burn-up and Burn-down Project Charts
- Bar Chart in Project Management
- What is Pareto Chart
- What is Pie Chart
- What is Control Chart
- What is Matrix Diagram
- What is Critical Path Diagram
- What is Cumulative Flow Project Chart
- What is Enterprise Environmental Factors
- What is Arrow Diagramming Method (ADM)
- What is Cost Baseline
- What is Cost-Benefit Analysis
- What is Cost Engineering?
- What is Cost Management Plan
- What is Cost of Quality?
- What is Cost Overrun?
- What is Cost Performance Index?
- What is Cost Plus Fixed Fee Contract?
- What is Cost Plus Incentive Fee Contract?
- What is Cost Plus Percentage Of Cost Contract
- What is Cost Reimbursable Contract?
Example with formulas Earned Value, Cost Variance and Schedule Variance
4. Earned Value
Formula: EV = % Complete x Budget at Completion
Earned Value estimates the amount of work done in terms of monetary value.
It is calculated by multiplying the percentage of work completed and the project value represented by budget at completion.
If the Budget at completion is $50,000 and 60% of the project is done, then the calculation can be made in the following way.
50,000 x 60/100
5. Cost Variance
Formula: CV = Earned Value – Actual Cost
Cost Variance measures the difference between actual cost and budgeted cost. This provides a good indicator of how your project is proceeding in terms of meeting the budget. If the actual costs are higher than the earned value, then it is a case for concern.
If Actual cost incurred is $400 and the Earned Value in $450 the Cost Variance will be
Earned Value – Actual Cost
450 – 400
6. Schedule Variance
Formula: SV = Earned Value – Planned Value
This is a simple calculation where the earned value is subtracted from the planned value. This value measures the actual progress against the scheduled progress.
Let’s say your project is worth $20,000 and scheduled to be completed in 4 months.
At the end of two months your earned value (EV) should be at $10,000, which is also the planned or estimated value at the start of the project. If your earned value and planned value are same, then there is no schedule variance. If it is let’s say at $7,500 then you would calculate Schedule Variance as
Earned Value – Planned Value
7500 – 10000
This shows that you have a negative Schedule Variance which means that the project is running behind schedule. You can also express SV as a percentage. In the above case it would be –25%