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How do you calculate Earned Value?

4 replies [Last post]
Wed, 2009-07-01 06:48
Ben Hall
User offline. Last seen 14 years 19 weeks ago. Offline
Joined: 5 Oct 2008
Posts: 30
Groups: Petro-Chem / Oil & Gas
Hi all,

How do I calculate the earned value on an activity on my project?

I have expended 40hrs out of 100hr budget.

Your help will be greatly appreciated!!!

Thanks & Regards
Ben
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Replies

Sun, 2009-07-26 09:57
#1
R. Catalan
User offline. Last seen 12 years 7 weeks ago. Offline
Joined: 15 Aug 2005
Posts: 314
Groups: None
Ben,

You said, you have expended 40hrs out of 100hr budget.

Therefore:
Budget = 100 hrs
Actual = 40 hrs
Earned = ?

Earned Value (EV) is calculated as Actual % complete x Budget
Assuming your Actual % complete is 50%,
then EV = 50% x 100 hrs = 50 hrs

You can follow Samer’s post to get the other values ie CV,SV, etc.

Regards,
R. Catalan
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Sat, 2009-07-25 13:25
#2
Vinay Goel
User offline. Last seen 13 years 19 weeks ago. Offline
Joined: 29 May 2009
Posts: 6
Groups: None
Now a days i am making presentations for the all topics of project Management i study for quick review . I have made 7 slides for EVM. They may be helpful for you. I will send you if you require.
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Fri, 2009-07-10 03:35
#3
Samer Zawaydeh
User offline. Last seen 5 years 7 weeks ago. Offline
Joined: 3 Aug 2008
Posts: 1664
Groups: Civil Engineering, Regional Representatives
Dear Ben,

In Earned Value Management, you need to determine the following paramenters, then you can calculate every other parameter you want

EV: Earned Value (value of the work completed to date)
PV: Planned Value (value of planed work at this date)
AC: Actal Cost (how much you sent until this date)
BAC: Budget at Completion.

SV= Schedule Variance = EV-PV
CV= Cost Variance = EV-AC
ETC = BAC - EV (how much money do i need to complete)
EAC = AC + BAC (what will the estimate at completion be)

I hope that the information helps. If you have more specific questions, please ask.

With kind regards,

Samer
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Wed, 2009-07-01 09:32
#4
Rafael Davila
User offline. Last seen 3 hours 10 min ago. Offline
Joined: 1 Mar 2004
Posts: 5229
Groups: Spider Project Team
Ben,

Earned Value is a measure of value calculated from physical percent completed (physical percent completed x budget) to be compared against actual resources expenditures. In you posting you are missing the physical percent completed, you are showing only actual resource expenditure and budget.

You can use as the basis Pyment Breakdown Amounts or Estimated Costs (Contractor’s usually don’t show this info to others) or you can use as the basis, budgeted man-hours, not unusual in industries where others provide the materials/equipments to be incorporated and your performance concern is man-hours. I would not be surprised if the Petro-Chem industry uses as the measure of concern man-hours units, well your statement seems to point in this direction.

Procedures might vary between software’s. In P3 you store actual resources expenditures using the “Store period performance” function under tools menu.

From P3 Help

Review earned value

The Budget Summary form displays the planned value (BCWS) and earned value (BCWP). In earned value analysis, you can compare BCWP to the BCWS and to the actual to date (ACWP).

The planned value reflects the work that should have been finished as of the data date according to the target plan; earned value measures the value of the work actually accomplished as of the data date. The difference between these two figures is called schedule variance (favorable if the earned value exceeds the planned value). The difference between ACWP and earned value is called cost variance (favorable if the earned value exceeds the actual cost).

P3 calculates earned value as the product of the budget and the resource percent complete. P3 uses schedule percent complete (PCT) if the resource percent complete is blank. P3 calculates the planned value as the product of the budget and the percent complete that the target should be on the current data date.

Choose Tools, Options, Earned Value and choose whether P3 uses the budget from the current schedule or the Target 1 schedule to calculate earned value and planned value.

For a reference on the theory follow the next link:

http://www.projectsmart.co.uk/docs/earned-value.pdf

Best regards,
Rafael

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