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Short note: Earned value analysis

Short answer

Earned value analysis (EVA) compares planned value (PV), earned value (EV), and actual cost (AC) to measure schedule and cost performance. Key metrics include SV, CV, SPI, CPI, and EAC; it provides early warnings and forecasts final cost.

Write a short note on earned value analysis.

Earned value analysis (EVA) is a project monitoring and control technique that measures project performance by comparing the value of work planned, the value of work actually done, and the actual money spent, all at the same date. It shows schedule and cost status in one system.

Basic terms

TermMeaning
PV (BCWS)Planned value: budgeted cost of work scheduled up to the date
EV (BCWP)Earned value: budgeted cost of work actually completed
AC (ACWP)Actual cost spent for the work completed
SV = EV - PVSchedule variance (positive = ahead)
CV = EV - ACCost variance (positive = under budget)
SPI = EV/PVSchedule performance index (>1 ahead)
CPI = EV/ACCost performance index (>1 under budget)
EAC = BAC/CPIEstimate at completion

Graphical view

 Cost
  |            BAC
  |        AC  .--
  |   PV  .-'-'
  |   .-'   EV
  | .'
  +------------ time

Uses

  • Finds schedule and cost variance at any reporting date.
  • Forecasts final cost (EAC) and the estimate to complete (ETC = EAC - AC).
  • Gives early warning, so corrective action is taken early.
  • Works for any project: construction, hydropower, road.

Interpretation

ResultMeaning
SPI > 1, CPI > 1Ahead of schedule, under budget
SPI < 1, CPI < 1Behind schedule, over budget
SPI = 1, CPI = 1As planned

✓ Answer checked by Claude Opus 5.5 (high effort)

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