Earned Value Management (EVM) Flashcards

A project has BAC = $400,000, AC = $180,000, EV = $150,000, and PV = $200,000. What is the Cost Variance (CV)?

Answer: -$30,000

CV = EV - AC = $150,000 - $180,000 = -$30,000, indicating the project is over budget by $30,000.

An earned value report shows CPI = 0.75 and SPI = 0.85. Which concern should the project manager address first?

Answer: Cost overrun, because CPI deviation is greater

CPI of 0.75 represents a 25% cost overrun, which is a larger deviation than SPI of 0.85 (15% schedule slippage), making cost the priority concern.

What does a Cost Performance Index (CPI) of exactly 1.0 mean?

Answer: The project is exactly on budget

CPI = 1.0 means EV equals AC — the project is earning exactly $1.00 of value for every $1.00 spent, i.e., on budget.

In EVM, 'Earned Value' is best described as:

Answer: The budgeted cost of work actually performed

EV (Earned Value) = BCWP = the portion of the approved budget allocated to the work that has actually been completed.

A project manager wants to forecast completion cost assuming both CPI and SPI will influence remaining work. Which EAC formula applies?

Answer: EAC = AC + [(BAC - EV) / (CPI × SPI)]

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

Which document formally establishes the performance measurement baseline (PMB) used in EVM?

Answer: The integrated project plan with approved scope, schedule, and cost baselines

The PMB is the time-phased integration of the approved scope, schedule, and cost baselines that EVM measures actual performance against.

A project's SPI was 0.7 for the first half but is now 0.95. What is the most likely explanation?

Answer: The project team accelerated work to recover the schedule

An improving SPI typically means the team has increased productivity or added resources to recover lost schedule ground.