What Is an Earned Value Management System?

Earned value management is a management technique that associates resource planning with schedules, technical costs, and schedule requirements. In this management, all work is planned, budgeted, and scheduled according to the earned value of the time period, thereby forming a baseline of cost and progress metrics. ^[1]

Earned Value Management

(Note: These values are all at the same time, which is equivalent to setting a check date.

(Under normal circumstances, project cost overruns and schedule lags are common. Use this situation to analyze and idealize the S curve as a straight line.)

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A project has a planned duration of 4 years and a total budgeted cost of 8 million yuan.

During the implementation of the project, it was learned from the cost calculation and related costs and schedules or records that the actual situation at the end of the second year after the start of the project was: the actual cost occurred at the end of the second year after the start of the project was 2 million yuan, and the work completed The planned budget cost is RMB 1 million.

Compared with the project budget cost, when the construction period is over half, the planned cost of the project should be 4 million yuan. Try to analyze the cost implementation and planned completion of the project.

Known conditions: PV = 4 million yuan AC = 2 million yuan EV = 1 million yuan

CV = EV-AC = 100-200 = -100 cost overrun of 1 million yuan

SV = EV-PV = 100-400 = -300 3 million yuan behind schedule

SPI = EV / PV = 100/400 = 25% Only completed 25% of the two-year construction period in two years, which is equivalent to completing only 1/4 of the total task.

CPI = EV / AC = 100/200 = 50% The actual cost of completing the same workload is twice the budgeted cost.