What is earned value analysis

What is earned value analysis?Earned value analysis is a method for measuring project performance. I

Whatisearnedvalueanalysis? Earnedvalue analysisisamethodformeasuringprojectperformance.Itindicateshow muchofthebudgetshouldhavebeenspent,inviewoftheamountofworkdonesofar,and thebaselinecostforthetask,assignment,orresource.Earnedvalueisalsoreferredtoas budgetedcostofworkperformed(BCWP). Whatdoesearnedvaluemeasure? Earnedvalueanalysisusesthreefundamentalvaluesforeachtask: ● budgetedcostofworkscheduled(BCWS), Thewhichistheportionofthecostthat isplannedtobespentonataskbetweenthetask'sstartdateandthestatusdate.For example,thetotalplannedbudgetfora4-daytaskis$100anditstartsonaMonday. IfthestatusdateissettothefollowingWednesday,theBCWSis$75. ● actualcostofworkperformed(ACWP), Thewhichisthetotalactualcostincurred whileperfonningworkonataskduringagivenperiod.Forexample,ifthe4-day taskactuallyincursatotalcostof$35duringeachofthefirst2days,theACWPfor ihisperiodis$70(buttheBCWSisstill$60). ● budgetedcostofworkperformed(BCWP), Thewhichisthepercentageofthe budgetthatshouldhavebeenspentforagivenpercentageofworkperformedona task.Forexample,ifafter2days60%oftheworkonataskhasbeencompleted,you mightexpecttohavespent60%ofthetotaltaskbudget,or$60. Fromthesethreefundamentalvalues,severalotherkeyvaluesaredetermined.Themost commonandusefulonesare: ● Costvariance(CV), whichisthedifferencebetweenatask'sestimatedcostandits Schedulevariance(SV), actualcost.CV=BCWP-ACWPwhichisthedifference betweenthecurrentprogressandthescheduledprogressofatask,intermsofcost. SV=BCWP-BCWS ● costperformanceindex(CPI), Thewhichistheratioofbudgetedcoststoactual scheduleperformanceindex(SPI), costs.CPI=BCWP/ACWPThewhichisthe ratioofworkperformedtoworkscheduled.SPI=BCWP/BCWS WhyshouldIperformearnedvalueanalysis? Whenyouperformearnedvalueanalysis,yougetreliableanswerstokeyquestionssuchas "Isthereenoughmoneyleftinthebudgettocompletetheproject?"and"Isthereenough timeleftinthescheduletofinishtheprojectontime?"Earnedvalueindicatorsexpress projectprogressintermsofcostandschedule.Ifyouwanttoknowwhetheryou'llrunoutof moneybeforeworkontheprojectiscompleted(orhaveasurplusafterit'sover)anearned valueanalysisisonewaytofindtheanswer. HowdoIinterpretearnedvalue? variances,costvariance, Earnedvalueindicatorsthataresuchascanbeeitherpositiveor