Professional learning guide
Earned Value Management Guide
Learn how planned value, earned value, and actual cost create objective variance, efficiency, and completion forecasts at a consistent status date.
Core concepts
Build the mental model first
- Planned Value (PV)
- The approved time-phased budget for work scheduled by the status date.
- Earned Value (EV)
- The approved budgeted value of work objectively completed by the status date.
- Actual Cost (AC)
- The recorded cost incurred for the completed work by the same status date.
- Budget at Completion (BAC)
- The approved total budget for the performance measurement baseline.
Formula reference
Calculate—and understand what direction means
| Measure | Formula | Interpretation |
|---|---|---|
| CPI | EV ÷ AC | Above 1.00 is favorable cost efficiency. |
| SPI | EV ÷ PV | Above 1.00 is favorable schedule efficiency. |
| EAC | BAC ÷ CPI | Common forecast when cost efficiency is expected to continue. |
| VAC | BAC − EAC | Positive forecasts an underrun; negative forecasts an overrun. |
Worked reasoning
Status review at month six
Situation
CPI is 0.88 and SPI is 0.94, while a major supplier risk remains open.
Manager’s approach
Verify progress measurement and actual-cost cut-off first. Investigate the work packages driving variance, update the risk-adjusted forecast, and agree corrective action with owners.
Takeaway
Indices are signals, not causes. A sound review connects the signal to root cause, remaining work, risk, and an accountable response.
PMP lens
What to remember in scenario questions
- Positive CV and SV are favorable.
- CPI and SPI below 1.00 are unfavorable.
- Use the EAC formula that matches the scenario assumption.
- TCPI describes the efficiency required on remaining work.
Common doubts
Questions learners ask
Can hours worked be used as earned value?
Only when the approved progress-measurement method legitimately earns value that way; effort alone is not completed scope.
Why must the status date match?
PV, EV, and AC become misleading when they describe different reporting cut-offs.
Does SPI predict the final date?
Not by itself. Review network logic, milestones, critical path, and remaining duration.
Practice tools
Apply performance & forecasting concepts
Earned Value Management
Integrate scope, schedule, and cost performance.
Open calculator →CPI / SPI Calculator
Measure cost and schedule efficiency.
Open calculator →TCPI Calculator
Calculate the efficiency needed to meet a cost target.
Open calculator →Sensitivity Analysis
Identify the assumptions that drive the outcome most.
Open calculator →What-If Analysis
Compare management scenarios before committing.
Open calculator →Project Completion Percentage Calculator
Calculate weighted project completion using completed scope value rather than subjective effort-spent estimates.
Open calculator →