EVM Problems and Solutions 2022

Running head: EARNED VALUE MANAGEMENT
EVM Problems and Solutions
Name of the Student:
Name of the University:

EARNED VALUE MANAGEMENT1
Exercise 2
a. Cost variance, schedule variance, cost performance index (CPI), and schedule
performance index (SPI) for the project
Based on the provided data,
PV = $23,000
EV= $20,000
AC = $25,000
BAC = $120,000
Terms Formula Calculation
Cost Variance (CV) CV= EV – AC = $ (20,000 – 25,000) = - $5,000
Schedule Variance
(SV)
SV= EV- PV = $ (20,000 – 23,000) = - $3,000
Cost Performance
Index (CPI)
CPI = EV/ AC = $20,000 / $25,000 = 0.8
= 80%
Schedule Performance
Index (SPI)
SPI= EV/ PV = $20,000 / $23,000 = 0.8695
= 86.95%
b. Project progressing
The project is not progressing well at all. When the value of CV is negative, then it
means the actual cost is more than its planned value. If the value of SV is negative, then it
takes long time to perform planned work (Miguel, Madria, & Polancos, 2019).
When the value of CPI is less than 100%, then the project is to be over budgeted and
if SPI is less than 100%, then the project is behind the schedule (Chen, Chen, & Lin, 2016).