Stages in Earned Value Analysis
- Creating the baseline budget: This is the first stage in setting up EVA. This budget is based on the project plan. It predicts the earned value through time. Normally, it is measured in person hours or workdays, for example: in a software development project.
- Monitoring Earned Value: The second stage is monitoring the earned value as the project progresses. This is achieved by monitoring the completion of each task. Actual cost(AC) is the actual cost of each task and it can be analyzed and collected.
- Schedule Variance(SV): This is the third stage which is measured in cost as EV-PV which is the deviation between planned work and completed work.
Example: Consider these values,
PV =40000
EV=35000
SV=35000-40000 = -5000Here the calculated SV value is negative and hence we conclude that the project is behind the original schedule.
- Time variance(TV): The difference between the current time and the time when the achievement of the earned value was planned to occur.
- Cost Variance(CV): This value is the difference between the actual cost and the earned value. Using this value we can estimate the accuracy of the original cost scheduled for the project. If the CV values are found to be negative, we conclude the project is over cost.
What is Earned Value Analysis (EVA)?
DefenseEarned Value Analysis (EVA) is also called “Budget cost of work performed”. It is considered a refinement of the cost-monitoring technique. This analysis was first carried out USA’s Department of Defense (DOD). In this analysis, a “value” is assigned to each track or work package based on the expenditure forecast. The value assigned is known as the “planned value (PV)”. The work that has not yet begun is given a value known as the “earned value of zero”. The total value credited to a project is called “earned value(EV)”, which is also represented as “money value”.
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