EVM Paper

Running head: EVM PAPER 1

EVM PAPER 1

EVM Paper

Mary Krenisky

Joe Scott

BUS 419

August 27, 2018

EVM Paper

In the current project, additional resources are added at in each work activity to complete the work packages in a quickly. The resources are added to these activities to reduce the slack that may originate if the project is accomplished based on planned resources only. An earned value analysis has to be performed to keep track of a project’s performance. This type of assessment gives a general review about the performance of a project along the chosen course. It has been noted that after adding more resources for the achievement of the ventures successfully, the slack time has been decreased and the work is going on faster than planned.

Earned value management is employed in different forms to determine the performance of the projects. By using this technique, the cost, schedule and, scope of the project are integrated that in turn aids the team of project administration to calculate and evaluate fulfillment and growth of the plan (Usmani, n.d.). The measurements of earned value are utilized by all managers of the projects. There are three main components of earned value management which are

• Actual cost

• Earned value

• Planned value

Planned value

It is the value of a task to be accomplished in a specified time. Overall planned value is known as ‘Budget at completion.’ Planned value also acts as a project’s baseline (Usmani, n.d.).

Actual cost

Actual cost denotes the quantity of money which is invested in the project until the present.

Earned value

Earned value is the worth of the task accomplished until the current time. Suppose, a project is terminated in the middle, the earned value will show the quality produced by the project till to date. The assessment of earned value management of the recent project indicates higher earned value and planned value. While the actual cost spent on the project is lower. The three cost’s that are planned value, actual cost and earned value are mixed to achieve the information about the completion of a project in a specific period.

Cost variance and schedule variance determine cost and schedule performances of the project. Following formula measures cost variance.

Cost variance = Earned value-actual cost (Cullen, 2016)

If cost variance is achieved in a negative value, it means that the project is higher than the budget.

Schedule variance is computed through a specific formula, i.e.

Schedule variance = Earned value/Planned value

If schedule variance is obtained in a negative value, it denotes the fact that the project is on the far side of the schedule (Cullen, 2016).

In the current project, negative cost variances are obtained for the months of January, February and, April which denotes that the activities are higher than the planned budget and require resources to be executed successfully. Negative schedule variances are obtained for January and June which shows that at these specific durations, the project is behind the set timetable. So, there is a need for additional resources to resolve the issue and complete the project fast.

References

Usmani, F. (n.d.). Earned Value Management (EVM) Analysis in Project Cost Management

Retrieved August 20, 2018, from https://pmstudycircle.com/2012/05/planned-value-pv-earned-value-ev-actual-cost-ac-analysis-in-project-cost-management-2/

Cullen, S.V. (2016). Earned value analysis. Retrieved August 21, 2018, from

https://www.wbdg.org/resources/earned-value-analysis