"Earned value" is a method for measuring project performance. It compares the amount of work that was planned with what was actually accomplished to determine if cost and schedule progress is as planned.
Earned value analysis is an industry standard used to measure a project's progress, forecast its completion date and final cost, and provide schedule and budget variances.
Schedule activities "earn value" as they are completed.
The earned value function in Unifier calculates the following for every scheduled activity: | The results of these calculations are used by Unifier to calculate the: |
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In Unifier, the earned value sheet always represents data by CBS code. Earned value calculations depend on the Company Cost Sheet and Cash Flow, and can optionally include activities on the Schedule Sheet. Users can also view a graphical representation of Earned Value, Budget at Completion (BAC) and Actual Cost.
Example Budget Cost of Work Scheduled (BCWS) Calculation
Assume a budget of $1000 is to be consumed by an activity scheduled to be performed in one week (5 days).
- BAC = $1000.00
- BCWS = $200.00 per day
- BCWS for day 3 will be $600.00
| Mar 10 | Mar 11 | Mar 12 | Mar 13 | Mar 14 | Total |
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BAC | $200 | $200 | $200 | $200 | $200 | $1000 |
BCWS | $200 | $200 | $200 |
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| $600 |
Note: This is a simplified example. Normally, costs are incurred per CBS. BAC, % Complete, and ACWP will differ based on the CBS in consideration
Example Budget Cost of Work Performed (BCWP) or Earned Value
This is the value of the planned (not actual) work performed by the status date, measured in currency.
- BCWP = BAC * % Complete
For example, based on the previous example, if 40% of the work is completed on day 3, then BCWP is $400.
| Mar 10 | Mar 11 | Mar 12 | Mar 13 | Mar 14 | Total |
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BAC | $200 | $200 | $200 | $200 | $200 | $1000 |
BCWS | $200 | $200 | $200 |
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| $600 |
BCWP | $200 | $200 | $ 0 |
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| $400 |
Example Actual Cost of Work Performed (ACWP) or the Actual Cost
This is the total of direct and indirect costs incurred in performing work during a given period. Assume that the task's actual cost (ACWP) at the status date is $750.
| Mar 10 | Mar 11 | Mar 12 | Mar 13 | Mar 14 | Total |
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BAC | $200 | $200 | $200 | $200 | $200 | $1000 |
BCWS | $200 | $200 | $200 |
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| $600 |
BCWP | $200 | $200 | $ 0 |
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| $400 |
ACWP | $250 | $200 | $300 |
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| $750 |
This earned value analysis identifies discrepancies between ACWP, BCWS, and BCWP— problems for which the user can then take immediate steps to remedy.
Earned Value and Derived Measures
From the examples above, Unifier will calculate the following values:
Cost Variance | Cost Variance (CV) is the difference between a task's estimated or budgeted cost and its actual cost. A negative variance indicates the project is over budget.
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Scheduled Variance | Scheduled Variance (SV) is the difference between the current progress and the scheduled progress of a task, in terms of cost. It is a comparison of the amount of work performed during a given period of time to what was scheduled to be performed. A negative variance means the project is behind schedule.
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Cost Performance Index | Cost Performance Index (CPI) is the ratio of budgeted costs of work performed to actual costs of work performed. A value of less than 1(less than 100%) indicates that the project is over budget; you are getting less work per dollar than planned.
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Scheduled Performance Index (SPI) | Schedule Performance Index (SPI) is the ratio of budgeted costs of work performed to budgeted costs of work scheduled. A value of less than 1 (less than 100%) indicates that the project is behind schedule.
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Cost Schedule Index | The Cost Schedule Index (CSI) reflects the relationship between CPI and SPI. CSI value should be close to 1.0. The farther the value from 1.0, then project recovery becomes more difficult to achieve.
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To Complete Performance Index (TCPI) | The To Complete Performance Index (TCPI) is the ratio of the work remaining to be done to funds remaining to be spent, as of the status date. A TCPI value greater than 1 indicates a need for increased performance; less than 1 indicates performance can decrease. This helps determine how much of an increase in performance is necessary on the remaining project tasks in order to remain within budget.
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Estimate At Completion | Estimate at Completion (EAC) is the expected total cost of a task or project, based on the performance as of status date.
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Variance At Completion | VAC is the difference between the Budget At Completion (BAC) and the Estimate At Completion (EAC).
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