What is Earned Value Management (EVM) and name its primary metrics (PV, EV, AC, CPI, SPI).

What is Earned Value Management (EVM) and name its primary metrics (PV, EV, AC, CPI, SPI).

• A. A performance measurement technique; PV (planned value), EV (earned value), AC (actual cost); CPI = EV/AC, SPI = EV/PV.
• B. A risk assessment framework.
• C. A budgeting method that only tracks costs.
• D. A stakeholder engagement model.

Answer: (A)

Earned Value Management is a performance measurement technique that brings together what was planned to be done, what has actually been done, and what it has cost to gauge how the project is performing in terms of scope, schedule, and cost. Planned Value represents the budgeted cost for the work scheduled to be completed by now; Earned Value is the budgeted cost for the work actually completed; Actual Cost is the real money spent to perform the work. From these, two key indicators come out: Cost Performance Index (CPI) = EV / AC, which shows cost efficiency, and Schedule Performance Index (SPI) = EV / PV, which shows schedule efficiency. For example, if PV is 1000, EV is 900, and AC is 1100, then CPI is 0.82 (cost overrun) and SPI is 0.90 (behind schedule). The other choices describe frameworks that don’t capture this integrated measurement approach, whereas EVM specifically uses planned value, earned value, and actual cost with the CPI and SPI ratios to assess performance.

Earned Value Management is a performance measurement technique that brings together what was planned to be done, what has actually been done, and what it has cost to gauge how the project is performing in terms of scope, schedule, and cost. Planned Value represents the budgeted cost for the work scheduled to be completed by now; Earned Value is the budgeted cost for the work actually completed; Actual Cost is the real money spent to perform the work. From these, two key indicators come out: Cost Performance Index (CPI) = EV / AC, which shows cost efficiency, and Schedule Performance Index (SPI) = EV / PV, which shows schedule efficiency. For example, if PV is 1000, EV is 900, and AC is 1100, then CPI is 0.82 (cost overrun) and SPI is 0.90 (behind schedule). The other choices describe frameworks that don’t capture this integrated measurement approach, whereas EVM specifically uses planned value, earned value, and actual cost with the CPI and SPI ratios to assess performance.