EVM Basics
This represents the total approved budget for the entire project.
What is Budget at Completion (BAC)?
A CPI of 0.80 indicates what about a project's budget performance?
The project is over budget.
This measure predicts the total expected cost of a project when completed.
What is Estimate at Completion (EAC)?
A project has CPI = 0.92 and SPI = 1.08. What does this tell the project manager?
The project is over budget but ahead of schedule.
This technique shortens project duration, generally by adding resources at an additional cost.
You may do this at a wedding if you're not invited.
What is project crashing?
This measure represents the budgeted value of work actually completed.
What is Earned Value (EV)?
An SPI of 1.15 indicates what about project schedule performance?
The project is ahead of schedule.
This EAC approach uses CPI to forecast the cost of the remaining project work.
What is EAC(f)?
A project has a negative Schedule Variance (SV). What performance issue should the project manager investigate?
The project is behind schedule.
When attempting to shorten the overall project duration, which activities should generally be prioritized for crashing?
Critical-path activities.
A project has a $40,000 budget and is 25% complete. What is its EV?
$10,000 (EV = $40,000 × 0.25)
EV = $35,000 and AC = $40,000. What is Cost Variance (CV)?
−$5,000 (CV = EV − AC).
BAC = $100,000, EV = $40,000, AC = $50,000, and CPI = 0.80. Calculate EAC(f).
$125,000.
EAC(f) = $50,000 + [($100,000 − $40,000) / 0.80]
A project has BAC = $150,000 and EAC = $175,000. What is the projected budget condition and amount?
The project is forecasted to finish $25,000 over budget.
An activity normally takes 8 days but can be crashed to 5 days. What is its maximum crash reduction?
3 days.
A project has EV of $18,000 and AC of $21,000. Which value represents actual spending?
AC ($21,000)
EV = $45,000 and PV = $50,000. What is SPI?
0.90 (SPI = EV / PV).
BAC = $200,000 and EAC(f) = $235,000. Calculate Variance at Completion (VAC).
−$35,000 (VAC = BAC − EAC).
A project experienced a one-time equipment repair. The project manager has developed a new, detailed estimate of the remaining work. Which EAC approach should be used?
EAC(e), using AC + revised ETC.
An activity costs $2,000 normally and $3,200 when crashed from 6 days to 4 days. What is the crash cost per day?
$600 per day.
Crash cost/day = ($3,200 − $2,000) / (6 − 4)
A project is 60% complete but was scheduled to be 75% complete. Which two EVM measures are needed to evaluate schedule performance?
Earned Value (EV) and Planned Value (PV).
EV = $72,000, AC = $80,000, and PV = $90,000. Calculate CPI and SPI and interpret both.
CPI = 0.90; SPI = 0.80. The project is over budget and behind schedule.
A project has spent $75,000. After reassessing the remaining activities, the project manager estimates another $95,000 will be needed. What is the revised EAC(e)?
$170,000 (EAC(e) = AC + ETC).
A project has CPI = 0.75, SPI = 0.85, and a forecasted final cost above BAC. Identify two concerns and an appropriate management response.
The project is over budget and behind schedule. The project manager should investigate the causes and evaluate corrective actions.
A project has two critical paths. The project manager crashes an activity on only one path, leaving the other unchanged. Why might the overall project duration remain the same?
The second critical path still determines the project's earliest possible completion date.