Earned value question

Submitted by riyaz145 on Mon, 01/07/2013 - 13:39

 After analyzing the status of your project, you determine that the EV is lower than PV. What should you expect if this trend continues?

1. The actual cost will be lower than planned

2. the EAC will be lower than planned

3. The project will finish behind schedule

4. The project will finish below the original cost estimate.

Kindly explain the reasoning behind the answer. Thanks.

Riyaz

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sunitaPMP

Mon, 01/07/2013 - 20:28

Ans is 3. The project will finish behind schedule.

EV=Earned Value

PV=Planned Value

As EV is lower than PV,means some planned tasks yet to be completed.

EV is lower than PV means

Schedule variance (SV)=EV-PV=-VE

-VE SV indicates project will  finish behind schedule if this trend continues.

 

Thanks..

 

riyaz145

Tue, 01/08/2013 - 06:07

 Its a silly mistake from my part for not reading the Q properly at the first instance...

I missed the PV part and was looking at EV alone and presumed why only schedule where as EV if (-ve) could also mean over budget.. :(

Thanks for your explanation.

Regards,

madunix (not verified)

Tue, 01/08/2013 - 06:50

 

I would calculate SPI=EV/PV <1 so behind the schedule(<1) i.e.  Example Here SPI being 0.8 means the project got completed only 80% of the planned portion in the scheduled time i.e. the project is running behind the schedule.

SPI = Schedule performance index. The schedule performance index (SPI) is a measure of progressachieved compared to progress planned on a project. It is sometimes used in conjunction with the cost performance index (CPI) to forecast the fi nal project completion estimates. An SPI value less than 1.0 indicates less work was completed than was planned. An SPI greater than 1.0 indicates that more work was completed than was planned. Since the SPI measures all project work, the performance on the critical path must also be analyzed to determine whether the project will fi nish ahead of or behind its planned fi nish date. The SPI is equal to the ratio of the EV to the PV. Equation: SPI = EV/PV.

Answer: C

 

nitinhamir5

Tue, 01/08/2013 - 18:57

How I look at is, EV and PV are given, means it's related to schedule and not about cost. You'll observe all choices A, B, D are related to cost and to further put faith in your answer check Schedule variance.


SV=EV-PV = -ve ( as EV will continue to be lower) , -ve would mean project will finish behind schedule.


Practice such questions and try to get them out of your way in 10 to 30 seconds , during exam as well.


Thanks