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Earned Value Management

A technique that integrates scope, schedule, and resource metrics to evaluate how the project is performing and progressing.

Key Points

  • Uses planned value (PV), earned value (EV), and actual cost (AC) to provide objective performance data.
  • Calculates variances and efficiency indicators (SV, CV, SPI, CPI) for early warning and control.
  • Supports forecasting of outcomes (EAC, ETC, TCPI) based on current performance trends.
  • Depends on a time-phased performance measurement baseline tied to the WBS and a defined status date.

Example

A $200,000 work package was planned to be 50% complete by week 8 (PV = $100,000). At the status date, it is 40% complete (EV = $80,000) and $110,000 has been spent (AC = $110,000). CV = EV - AC = -$30,000 (over budget), CPI = 80,000/110,000 = 0.73 (cost inefficiency), SV = EV - PV = -$20,000 (behind schedule), and SPI = 80,000/100,000 = 0.80. The project manager uses these results to adjust resources and reforecast EAC.

PMP Example Question

Which approach objectively measures performance and forecasts results by integrating scope, schedule, and cost data against a performance measurement baseline?

  1. Critical Path Method (CPM)
  2. Resource leveling
  3. Earned Value Management (EVM)
  4. Rolling wave planning

Correct Answer: C — Earned Value Management

Explanation: EVM integrates scope, schedule, and cost information to track performance and predict outcomes using metrics like PV, EV, and AC.

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