Earned Value Concept, BCWP, BCWS, ACWP

Info SISINDOTEK

Variance Metrics
Schedule Variance: SV = BCWP - BCWS
Schedule Performance Index: SPI = BCWP / BCWS
Cost Variance: CV = BCWP - ACWP
Cost Performance Index: CPI = BCWP / ACWP

Criteria
SV, CV = 0 Project On Budget and Schedule
SV, CV < 0 Over Budget and Behind Schedule
SV, CB > 0 Under Budget and Ahead of Schedule
CPI, SPI = 1 Project On Budget and Schedule
CPI, SPI < 1 Over Budget and Behind Schedule
CPI, SPI > 1 Under Budget and Ahead of Schedule

Example

Project Statement:
A supplier is contracted to install ten new testers at a semiconductor manufacturing plant. The project must be completed within 6 weeks duration. 600 manhours is the estimated labor resource commitment, at a $10 per hour fully loaded time and materials cost.

Goal Statement:
Use EV to measure project performance at week 3
Use traditional methods to measure performance
Compare the results using both approaches

Determine Project Status at Week 3 using traditional methods:

Given Information:
At Week 3, 4 testers have been installed
400 manhours have been consumed

3/6 weeks = 50% complete
4/10 testers installed = 40% complete
400/600 manhours “cost” budgeted = 67% complete

What is the project status at week 3? Is the project ahead or behind schedule and is it under budget or over budget? It is very difficult to tell

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Answer (Explanation)

Determine BCWP, BCWS, and ACWP:

BCWP = (600 mh*$10/hr )* (4 testers / 10 testers) = $2400
BCWS = (600 mh*$10/hr)*(3 weeks / 6 weeks) = $3000
ACWP = 400mh*$10/hr =$4000

With this information, we can determine the metrics:

SV = BCWP – BCWS = $2400 – $3000 = - $600
CV = BCWP – ACWP = $2400 – $4000 = -$1600
SPI = BCWP / BCWS = 2400/3000 = .8 Criteria: .8<1
CPI = BCWP / ACWP = 2400/4000 = .6 Criteria: .6<1

Conclusion : Our project is behind schedule and over budget!