📘 Earned Value Analysis (EVA) / Earned Value Management (EVM)

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🔹 1. Definition

Earned Value Analysis (EVA) is a project monitoring and control technique used to measure project performance by comparing planned work, actual cost, and earned value of completed work.

👉 In simple words: It tells us whether the project is on time and within budget or not using numbers.

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🔹 2. Key Idea ⭐

EVA combines three key values:

• 📌 Planned work (what should be done)
• 📌 Actual cost (what is spent)
• 📌 Earned value (what is actually completed)

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🔹 3. Three Important Terms

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🔸 1. Planned Value (PV) 📅

Budgeted cost of work scheduled

👉 Also called Budgeted Cost of Work Scheduled (BCWS)

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🔸 2. Actual Cost (AC) 💰

Real cost spent on work done

👉 Also called Actual Cost of Work Performed (ACWP)

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🔸 3. Earned Value (EV) 📊

Budgeted cost of actual completed work

👉 Also called Budgeted Cost of Work Performed (BCWP)

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🔹 4. Key Formulas ⭐

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🔸 Cost Variance (CV)

CV = EV - AC

👉 Shows budget performance

• CV > 0 → under budget ✅
• CV < 0 → over budget ❌

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🔸 Schedule Variance (SV)

SV = EV - PV

👉 Shows time performance

• SV > 0 → ahead of schedule ✅
• SV < 0 → behind schedule ❌

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🔸 Cost Performance Index (CPI)

CPI = EV / AC

👉 Efficiency of cost usage

• CPI > 1 → good performance
• CPI < 1 → poor performance

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🔸 Schedule Performance Index (SPI)

SPI = EV / PV

👉 Efficiency of schedule

• SPI > 1 → ahead of schedule
• SPI < 1 → delayed project

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🔹 5. Example

Given:

• PV = 100,000
• EV = 80,000
• AC = 90,000

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Calculations:

👉 CV = EV - AC = 80,000 - 90,000 = -10,000 (Over budget ❌) 👉 SV = EV - PV = 80,000 - 100,000 = -20,000 (Behind schedule ❌) 👉 CPI = 80,000 / 90,000 = 0.89 (Poor cost efficiency) 👉 SPI = 80,000 / 100,000 = 0.8 (Delayed project)

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🔹 6. EVA Diagram Description

Planned Value (PV)
        ↓
Compare with Earned Value (EV)
        ↓
Compare with Actual Cost (AC)
        ↓
Calculate Variances (CV, SV)
        ↓
Performance Analysis (CPI, SPI)

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🔹 7. Importance of Earned Value Analysis ⭐

✔ Measures project performance objectively ✔ Helps in early detection of problems ✔ Controls cost and schedule risks ✔ Improves decision-making ✔ Useful for project forecasting

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🔹 8. Advantages

• Combines scope, cost, and time
• Provides early warning signals
• Quantitative and accurate
• Widely used in real projects

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🔹 9. Limitations ❌

• Complex calculations
• Requires accurate data
• Difficult for small projects
• Needs continuous updates

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🔹 10. EVA vs Traditional Monitoring

Feature	EVA	Traditional Method
Basis	Quantitative	Qualitative
Accuracy	High	Medium
Focus	Cost + Schedule + Scope	Basic tracking
Early warning	Yes	No

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🔹 11. Key Exam Points

• EVA uses PV, EV, AC

• Important formulas:

  • CV = EV - AC
  • SV = EV - PV
  • CPI = EV / AC
  • SPI = EV / PV

• Used for project monitoring and control

• Detects cost and schedule deviations

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🔹 12. Short Summary

• Earned Value Analysis is a technique to measure project performance using cost and schedule data
• It compares planned work, actual cost, and completed work
• Helps in controlling project time and budget

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🔹 13. Quick Exam Answer (2–3 lines)

Earned Value Analysis (EVA) is a project management technique used to measure project performance by comparing Planned Value, Earned Value, and Actual Cost. It helps in analyzing cost and schedule performance using formulas like CV, SV, CPI, and SPI.

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🔹 14. Likely Exam Questions

1. Define Earned Value Analysis.
2. What are PV, EV, and AC?
3. Write formulas of CV, SV, CPI, SPI.
4. What is the importance of EVA?
5. Differentiate between CPI and SPI.
6. Why is EVA used in project management?
7. Draw diagram of Earned Value Analysis process.