Join Aileen Ellis for an in-depth discussion in this video Calculating CV and CPI, part of Project Management: Calculating Earned Value.
Now let's see how we are doing…from a cost standpoint.…We know that Cost Variance equals Earned Value…minus Actual Cost.…If we plug in the numbers,…Cost Variance equals $150,000 minus $225,000.…The Cost Variance equals a -$75,000.…It's important to understand what this really means.…We have $150,000 worth of work complete.…
We spent $225,000 to complete this work.…Therefore, we are running over budget…by $75,000.…At this point on our project,…we would try to determine why we are running…over budget and what we can do about this…moving forward.…Let's look at the XY bar chart.…We can see the earned value line, the red line,…is lower than the actual cost line, the green line.…Therefore, we have less work complete than money spent.…
We are running over budget.…Now let's determine the Cost Performance Index.…We call this the CPI.…Let's calculate first and then explain what it means.…CPI equals Earned Value divided by Actual Cost.…If we plug in the numbers,…CPI equals $150,000 divided by $225,000.…This equals .67.…
Cost Performance Indexes are almost always expressed…
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- What is earned value management?
- Who uses EVM?
- Determining budget at completion, planned value, and earned value
- Calculating schedule and cost variance as well as schedule and cost performance index
- Forecasting future costs
- Computing TCPI for project success
- Exploring limitations of EVM<br><br>
- The PMI Registered Education Provider logo is a registered mark of the Project Management Institute, Inc.