CPI > 1 means than “better planned” CPI < 1 means than “slower planned” Earned Value Analysis -Variances types of variances; (spending)variance (CV)–difference between budgeted cost of work performed (earned value) (BCWP) and actual cost of that work (ACWP) = Earned Value Actual cost to date – Indicates how the planned cost differs from actual cost (SV)–difference between earned value (BCWP) and cost of work we scheduled to perform to date (BCWS) (TV)–difference between time scheduled for work performed (STWP) and actual time to perform it (ATWP) Cost variance, CV = BCWP ACWP – A CPI value close to 1.0 provides a strong indication that the project is within its defined budget. CV is an absolute indication of cost savings (against planned costs) or shortfall at a particular stage of a project. Earned Value Variance –Formula CV = BCWP (negative value -cost overrun) –ACWP SV = BCWP (negative value -behind schedule) –BCWS TV = STWP (negative value -delay) –ATWP Index (Ratios) Cost Performance Index (CPI) = BCWP/ACWP Schedule Performance Index (SPI) = BCWP/BCWS Time Performance Index (TPI) = STWP/ATWP EXAMPLE Assume that operations on a Work Package cost RM 1,500 to complete. They were originally scheduled to finish today. this point, we actually spent RM1,350. And we estimate that we have completed two thirds (2/3) of the work. What are the cost and schedule variances? CV = BCWP = 1500 (2/3) = -350 –ACWP –1350 SV = BCWP = 1500 (2/3) = -500 –BCWS –1500 CPI = BCWP/ACWP = 1500(2/3)/1350 = 0.74 SPI = BCWP/BCWS = 1500(2/3)/1500 = 0.67 Spending higher than budget, and given what we have spent, we are not as far along as we should be (have not completed as much work as we should have)
CPI > 1 means “better than planned” CPI < 1 means “slower than planned” Earned Value Analysis -Variances types of variances; (spending)variance (CV)–difference between budgeted cost of work performed (earned value) (BCWP) and actual cost of that work (ACWP) = Earned Value – Actual cost to date Indicates how the planned cost differs from actual cost (SV)–difference between earned value (BCWP) and cost of work we scheduled to perform to date (BCWS) (TV)–difference between time scheduled for work performed (STWP) and actual time to perform it (ATWP) Cost variance, CV = BCWP – ACWP A CPI value close to 1.0 provides a strong indication that the project is within its defined budget. CV is an absolute indication of cost savings (against planned costs) or shortfall at a particular stage of a project. Earned Value Variance –Formula CV = BCWP –ACWP (negative value -cost overrun) SV = BCWP –BCWS (negative value -behind schedule) TV = STWP –ATWP (negative value -delay) Index (Ratios) Cost Performance Index (CPI) = BCWP/ACWP Schedule Performance Index (SPI) = BCWP/BCWS Time Performance Index (TPI) = STWP/ATWP EXAMPLE Assume that operations on a Work Package cost RM 1,500 to complete. They were originally scheduled to finish today. this point, we actually spent RM1,350. And we estimate that we have completed two thirds (2/3) of the work. What are the cost and schedule variances? CV = BCWP –ACWP = 1500 (2/3) –1350 = -350 SV = BCWP –BCWS = 1500 (2/3) –1500 = -500 CPI = BCWP/ACWP = 1500(2/3)/1350 = 0.74 SPI = BCWP/BCWS = 1500(2/3)/1500 = 0.67 Spending higher than budget, and given what we have spent, we are not as far along as we should be (have not completed as much work as we should have)