Earned Value Management

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Earned Value Management

Postby komal Thu Jul 27, 2017 5:48 pm

Could not get difference between Actual Cost and Earned Value?
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Location: Canada

Re: Earned Value Management

Postby nazrulq Thu Jul 27, 2017 11:18 pm

Actual cost is the money you have spend or cost incurred during the certain time of the project . Denotes as AC
CV =EV-AC ;CV= Cost Variance

Earn Value is the work done till the certain time of project in terms of $ amount. Sum of the
planned value of completed work usually denotes as EV

SV= EV-PV; SV= Schedule Variance

Performance index cost ,

Performance index schedule ,
Prachi Bansal
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Joined: Wed Dec 21, 2016 7:06 am

Re: Earned Value Management

Postby Prachi Bansal Mon Jul 31, 2017 6:14 am

Actual Cost is the money spent/incurred to complete a part of the project. While, Earned Value is the $ value you have earned while doing that part of the project or according to the plan how much $ amount of work you have completed.

For Eg:

You have to complete a project in 10 months and budget for the same is $10,000. Now, At the end of 2nd month you have spent $3,000 and you have only completed 20% of the total work.

So in this case, At the end of 2nd Month :

AC = $3,000
EV = 20% of $10,000 = $2,000

You were suppose to complete the work in $2,000 i.e. this is the value of work you have gained/done so far. But you have spent $3,000 already. That means there's a cost variance. You are not going as per the plan.

That CV is calculated as :

CV = EV - AC = $2000 - $3000 = - $1000

Hope this was helpful to you. :)

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