Session 7B – Control costs

Question 1

Consider a project with a budget of £1m (BAC). It has a planned duration of 18 months. After 10 months the
reported figures are:
Cost Type Amount
Planned Costs £600k
Actual Costs £500k
Earned Value £460k

Calculate CPI, CV, SPI, SV, Final Coat, Final Planned Duration and % Complete. Comment on the figures you have
calculated.

Formulae

CPI = EV/AC

SPI = EV/PC

CV = EV – AC

SV = EV – PC

Final Cost = BAC/CPI

Final Planned Duration = Planned Duration/SPI

% complete = (EV/BAC) *100

CPI 0.92

SPI 0.77

CV -40

SV -140

Final Cost £1,087k

Final Planned Duration 23 months

% complete 46%
 Session 7B – Control costs

A CPI value less than 1, or a negative CV indicates that the project will be over budget. This is supported by the Final
Cost calculation indicating a budget overrun of just under 9%.
A SPI value less than 1, or a negative SV, indicates that the project will be late. This is supported by the Final Planned
Duration figure of 23 months.
The project is less than half finished (%complete = 46%) and is going to be late by 5 months in a 18 month project.

This is perhaps more worrying than the cost overrun as this is less than a potentially acceptable 10% overall.
I would investigate the reasons for the delay and see if it can be corrected.