With the earned value equations in hand, we can now turn to applying them to project situations. We must first establish a ground rule for taking credit for accomplishment. For the moment, the rule is the simplest possible: 100% earned value is given for 100% task completion; else, no credit is given for a partial accomplishment. This is the rule we applied in the bicycle example.
Look now at Figure 6-1. The planned value for the two tasks, A and B, is $50,000. Only Task A is completed, so under the "all-or-nothing" credit rule, no EV is claimed for Task B. Using the equations in Table 6-4, we calculate the report as shown in Figure 6-1. We see that we are $30,000 behind schedule. This means that $30,000 of work planned for the period was not accomplished and must be done at a later time. We are $10,000 over cost, having worked on Task B and claimed no credit and finished Task A for an unspecified cost for a total actual cost of $30,000.
Planned Value S30K
Tesk A: Completed, value claiiwíf S20K
■hj: completed: rw value credited
Toral platins^ VeiJuo- $5CK
PISrtnÉd Valué, PV: Actual Cost. AC Edrrad Valué-, EV: Cosl Variance: Schedule variance. Figure 6-1: Two-Task One-Period Example.
S5QK S30K S20K
Now in Figure 6-2, we see that we complete Task B, claim $30,000 of earned value, and calculate the variances for Period 2. Of course since there was no planned value and a big earned value, we get a positive schedule variance. Overall from the two periods combined, we get the following performance record for Tasks A and B:
Schedule variance at the end of Period 2: EV - PV = $0
Cost variance at the end of Period 2: EV - AC = -$10,000
Planned 'or Panod 1
Pijrinod lor Period 1
Task B Ptsmed Value. 5J0K
Evaluanon Period 3
Actually in Ptjriod 2
Task A: G&nplgfad in Ponod ■ V.ilun Cliiinwil SMK in P(*kkJ I
Task R - ComtiKod Poriod 2 Villi.ir CUuned $30K in Period 2
Planned Vakw. PV Aciual Cos-i. AO: Earned VaJue, EV: CMt Variance: Schedule variance
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What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.