CAM Earned Value Management

Question 1

What is the primary purpose of Earned Value Management (EVM) in project management?

Accepted Answer

To measure project performance and forecast trends

Answer

Earned Value Management (EVM) is a project management methodology that integrates project scope, schedule, and cost data. Its primary purpose is to objectively measure project performance against planned baselines. By tracking progress and expenditures, EVM helps forecast future trends and completion outcomes, enabling proactive decision-making and control.

Question 2

Which metric measures the value of work performed in EVM?

Accepted Answer

Earned Value (EV)

Answer

Earned Value (EV) is a key metric in EVM that quantifies the value of the work actually performed and completed to date. It represents the budgeted cost of the work performed, indicating how much budget should have been spent for the work accomplished. EV is crucial for assessing the true progress of a project against its plan.

Question 3

How is Cost Variance (CV) calculated in Earned Value Management?

Accepted Answer

CV = EV - AC

Answer

Cost Variance (CV) is calculated by subtracting the Actual Cost (AC) from the Earned Value (EV). This metric indicates whether the project is over or under budget for the work completed. A positive CV means the project is under budget, while a negative CV signifies it is over budget, providing insight into cost performance.

Question 4

What does a Schedule Performance Index (SPI) value less than 1 indicate?

Accepted Answer

Project is behind schedule

Answer

The Schedule Performance Index (SPI) is calculated as Earned Value (EV) divided by Planned Value (PV). An SPI value less than 1 indicates that the project is progressing slower than planned, meaning less work has been completed than scheduled. Therefore, a value less than 1 signifies that the project is behind schedule.

Question 5

Which EVM metric provides insight into project cost efficiency?

Accepted Answer

Cost Performance Index (CPI)

Answer

The Cost Performance Index (CPI) is an EVM metric that measures the cost efficiency of a project, calculated by dividing Earned Value (EV) by Actual Cost (AC). A CPI greater than 1 indicates that the project is under budget for the work performed, showing good cost efficiency. Conversely, a CPI less than 1 suggests cost overruns.

(CAM) Control Account Manager Certification Practice Test

(CAM) Control Account Manager Certification Practice Test

CAM Earned Value Management