APMG EVM Foundation — Fundamentals of Earned Value Management — Questions and Answers

Question 1: Can procurement use Earned Value Management?

No
Yes (Correct answer)

Correct answer: Yes

Earned Value Management (EVM) can be used in procurements and is often applied to monitor and control the performance of contractors or vendors involved in a project. EVM provides a systematic approach to measuring project performance in terms of cost and schedule, and it can be extended to procurement activities as well.

Question 2: If TCPI(BAC) is significantly greater than 1.0, what does it signal?

The remaining work must be completed at a higher efficiency than currently achieved (Correct answer)
The project is ahead of schedule
The project is on track to finish within budget
The remaining budget is sufficient

Correct answer: The remaining work must be completed at a higher efficiency than currently achieved

A TCPI well above 1.0 means the team must dramatically improve cost efficiency to finish within the original budget.

Question 3: Undistributed Budget (UB) in EVM refers to:

Budget that is part of the CBB but not yet allocated to Control Accounts (Correct answer)
Budget from expired work packages
Budget that has been spent but not yet assigned to a work package
Reserves held outside the contract budget base

Correct answer: Budget that is part of the CBB but not yet allocated to Control Accounts

UB is authorized budget within the CBB that has not yet been formally assigned to Control Accounts and must be distributed promptly.

Question 4: EVMS surveillance by DCMA is conducted to:

Approve each monthly EVM data submission
Conduct the IBR on behalf of the program office
Calculate the contractor's EAC independently
Verify ongoing compliance with ANSI/EIA-748 guidelines after system acceptance (Correct answer)

Correct answer: Verify ongoing compliance with ANSI/EIA-748 guidelines after system acceptance

DCMA surveillance monitors whether the contractor continues to implement the EVMS in accordance with the accepted system description after the initial validation.

Question 5: Discrete effort in EVM refers to:

Work proportionally tied to another discrete task
Support activities that cannot be directly linked to a deliverable
Tasks measured solely by time elapsed
Tasks with a definable start and end point and measurable output (Correct answer)

Correct answer: Tasks with a definable start and end point and measurable output

Discrete effort represents direct work that produces a specific deliverable and can be objectively measured for progress.

Question 6: The five categories of ANSI/EIA-748 guidelines are:

Scope, Schedule, Cost, Risk, and Reporting
WBS, OBS, RAM, IBR, and Surveillance
Organization, Planning & Budgeting, Accounting, Analysis & Management Reports, Revisions & Data Maintenance (Correct answer)
Planning, Executing, Monitoring, Controlling, and Closing

Correct answer: Organization, Planning & Budgeting, Accounting, Analysis & Management Reports, Revisions & Data Maintenance

The 32 ANSI/EIA-748 guidelines are divided into five categories covering organizational structure, planning, accounting, analysis, and change control.

Question 7: Which EAC formula is most appropriate when both cost and schedule efficiency are expected to influence remaining work?

BAC / CPI
BAC / SPI
AC + (BAC - EV) / (CPI × SPI) (Correct answer)
AC + (BAC - EV)

Correct answer: AC + (BAC - EV) / (CPI × SPI)

EAC = AC + (BAC - EV) / (CPI × SPI) is used when both cost and schedule performance factors are expected to continue impacting the remaining work.

Question 8: The Units Complete technique measures progress by:

Tying progress to elapsed schedule time
Counting the number of identical physical units completed against the total planned (Correct answer)
Estimating subjective percent complete
Measuring the proportion of budget spent

Correct answer: Counting the number of identical physical units completed against the total planned

Units Complete earns value per completed unit (e.g., installed panels, tested assemblies), making it highly objective and repeatable.

Question 9: You can utilize the Earned Value Methodology (EVM) to

Calculate the number of days left in the project
Forecast future performance based on past performance (Correct answer)
Calculate the value provided to the customer
Calculate the profitability of the project

Correct answer: Forecast future performance based on past performance

The Earned Value Methodology (EVM) can be used as a means to forecast future performance based on past performance. <br> EVM is a project management technique that integrates the measurement of project scope, schedule, and cost performance. It involves comparing the planned value (PV), earned value (EV), and actual cost (AC) to assess the project's progress and performance.

Question 10: The To-Complete Performance Index (TCPI) based on BAC is calculated as:

EV / AC
(EAC - AC) / (BAC - EV)
(BAC - EV) / (BAC - AC) (Correct answer)
(BAC - AC) / (BAC - EV)

Correct answer: (BAC - EV) / (BAC - AC)

TCPI(BAC) = (BAC - EV) / (BAC - AC), representing the required cost efficiency to finish within the original budget.

Question 11: Which document authorizes a contractor to perform specific work in EVM?

Contract Performance Report (CPR)
Integrated Master Schedule (IMS)
Baseline Change Request (BCR)
Work Authorization Document (WAD) (Correct answer)

Correct answer: Work Authorization Document (WAD)

A Work Authorization Document formally authorizes the performer (Control Account Manager) to begin work on a defined scope.

Question 12: An ETC based on a new independent estimate means:

The original estimate is disregarded and a fresh estimate replaces it (Correct answer)
The ETC equals BAC divided by CPI
The ETC equals BAC minus EV
The ETC equals current AC divided by percent complete

Correct answer: The original estimate is disregarded and a fresh estimate replaces it

When the original estimate is deemed fundamentally flawed, a new independent re-estimate is used for ETC, ignoring the original budgets.

Question 13: What is the correct formula for Schedule Variance (SV)?

SV = EV - AC
SV = EV - PV (Correct answer)
SV = AC - PV
SV = BAC - EAC

Correct answer: SV = EV - PV

Schedule Variance is calculated as EV minus PV, measuring the difference between work accomplished and work planned to be accomplished.

Question 14: At what approximate project completion percentage does the CPI typically become a reliable final cost predictor?

20% (Correct answer)
50%
75%
10%

Correct answer: 20%

Research by Christensen and others shows CPI stabilizes and becomes a reliable final cost predictor at approximately 20% project completion.

Question 15: If SPI is more than 1, it means that

Earned Value (EV) is less than Planned Value (PV)
Project is ahead of schedule (Correct answer)
Project progress is according to the baseline plan
Project is behind schedule

Correct answer: Project is ahead of schedule

If the SPI is greater than 1, it indicates that the project is ahead of schedule. This means that the value of the work completed (EV) is higher than the planned value (PV), suggesting that the project is progressing faster than expected and is ahead of the scheduled timeline.

Question 16: What does a negative Variance at Completion (VAC) indicate at the time of reporting?

The project will finish ahead of schedule
The project has earned more value than planned
The project is predicted to overrun its budget at completion (Correct answer)
The project will come in under its original budget

Correct answer: The project is predicted to overrun its budget at completion

A negative VAC (BAC - EAC < 0) means the EAC exceeds the BAC, indicating the project is projected to cost more than originally budgeted.

Question 17: Which EVM performance metric is generally considered most stable and reliable for forecasting after a project reaches 20% completion?

Schedule Performance Index (SPI)
Schedule Variance (SV)
Cost Performance Index (CPI) (Correct answer)
Variance at Completion (VAC)

Correct answer: Cost Performance Index (CPI)

Research by Christensen and others shows that CPI stabilizes after 20% project completion and rarely improves by more than 10%, making it the most reliable forecasting indicator.

Question 18: CPI less than 1 indicates that

Actual Cost (AC) is less than Planned Value (PV)
Project performance is as per baseline plan
Project is over budget (Correct answer)
Project is under budget

Correct answer: Project is over budget

If the CPI is greater than 1, it means that the project is under budget. This indicates that the actual cost incurred (AC) is lower than the value of the work completed (EV), suggesting that the project is performing better than expected in terms of cost efficiency.

Question 19: What does PMB stand for in an EVM system?

Performance Measurement Baseline (Correct answer)
Planned Measurement Baseline
Program Master Budget
Project Management Budget

Correct answer: Performance Measurement Baseline

The PMB (Performance Measurement Baseline) is the time-phased budget plan against which project performance is measured.

Question 20: What does LOE stand for

Lost Over Estimate
Last Of Effort
Level Of Effort (Correct answer)
Level Over Effort

Correct answer: Level Of Effort

LOE stands for Level of Effort. It is a term commonly used in project management to estimate the amount of work required to complete a task or project. LOE represents the overall amount of time, resources, and effort needed to accomplish a particular activity or objective. It is usually expressed in terms of hours, days, or other units of time. The level of effort estimation helps in planning and allocating resources, determining project timelines, and assessing the feasibility of project goals.

Question 21: The Percent Schedule Variance (%SV) is expressed as:

(SV / AC) × 100
(SV / PV) × 100 (Correct answer)
(SV / BAC) × 100
(SV / EV) × 100

Correct answer: (SV / PV) × 100

%SV = (SV / PV) × 100, normalizing schedule variance as a percentage of the planned value.

Question 22: The Cost/Schedule Status Report (CSSR) was designed for:

Contracts in the design phase only
All DoD contracts regardless of size
Smaller contracts that do not require full CPR/IPMR reporting (Correct answer)
Subcontractors only

Correct answer: Smaller contracts that do not require full CPR/IPMR reporting

The CSSR provided a simplified EVM reporting format for smaller contracts that warranted some oversight but not the full rigor of CPR reporting.

Question 23: The ANSI/EIA-748 standard contains how many EVM guidelines?

25
32 (Correct answer)
20
48

Correct answer: 32

ANSI/EIA-748 defines 32 guidelines organized into five categories that an EVMS must satisfy to be considered compliant.

Question 24: An EVMS Description Document (EVMSD) serves what purpose?

Summarizes the monthly EVM performance data
Provides the contract WBS and dictionary
Documents how the contractor's management system meets each of the 32 ANSI/EIA-748 guidelines (Correct answer)
Records all baseline changes made during contract execution

Correct answer: Documents how the contractor's management system meets each of the 32 ANSI/EIA-748 guidelines

The EVMSD (also called System Description) explains the contractor's processes and procedures that satisfy each ANSI/EIA-748 guideline.

Question 25: The 20/80 earned value technique credits earned value as:

20% at task start and 80% at task completion (Correct answer)
20% at each of four milestones plus 20% at completion
20% per period over a 5-period task
80% at start and 20% at completion

Correct answer: 20% at task start and 80% at task completion

The 20/80 technique is a fixed formula that gives 20% credit when the task starts and the remaining 80% only upon completion.

Question 26: A project reports SPI = 1.15. What does this mean?

The project is under budget
The project is ahead of schedule (Correct answer)
The project is over budget
The project is behind schedule

Correct answer: The project is ahead of schedule

An SPI greater than 1.0 means the project is earning more value than planned, indicating it is ahead of schedule.

APMG EVM Foundation — Fundamentals of Earned Value Management

The EVM Foundation certification validates knowledge of Earned Value Management principles, performance measurement, variance analysis, forecasting, and reporting techniques used to integrate and control project scope, time, and cost objectives.

Questions

30 min

Time Limit

65%

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