Project Management CCE2-Marketing

Topic : Earned Value Analysis

Group : 6

M2022125: Vivek Bhanushali

M2022127: Suraj Brahmne
M2022157: Pratik Morande
M2022159: Pradeepkumar Pal
M2022160: Rohit Pal
M2022173: Amol Shinde
Under the Guidence of : Prof. Navin Bhatt
Earned Value Analysis(EVA):
• Earned Value Analysis or EVA is an evaluation technique used in project management to analyze a
project’s progress at any given time.
• EVA takes into account the total work done so far in a project in relation to time, cost, and schedule
status.
• The earned value method enables project managers to assess the team’s achievements while
matching them with associated budgets and time. 
• Formula: Earned value = % of completion x project budget
• For Example:
If you have a project budget of 40 Lac and your team has completed 20% of your project, you
would multiply 40 Lac by 20% for an earned value of 8 Lac. If your team has spent 8 Lac or less on the
project so far, you can confirm the project aligns with the budget.
Consumer Performance Index –

• Budget allocated to a project in the initial stage.

• It is Sum of costs to be incurred during the project.

• Goal is to stay within the budget

• Several indicators which help to keep a track on the progress of the project

• It is used as a performance indicator

• CPI formula – Earned value(EV)/ Actual cost(AC)

• EV refers to authorized project Budget , AC refers to expenses accrued on a project .

• Knowing your CPI shows whether you are operating within budget or need to come up with cost saving
measures.
• The cost performance index (CPI) is a measure of the
financial effectiveness and efficiency of a project. It represents the amount
of completed work for every unit of cost spent.
• For Example:
  If a project has a earned value (EV) of Rs.200000 but actual costs (AC) were Rs.
120000
Then, CPI = EV / AC = 200000 / 120000 = 1.66

• Significance of CPI:
a) If the ratio has a value higher than 1 then it indicates the project is performing well
against the budget.
b) A CPI of 1 means that the project is performing on budget.
c) A CPI of less than 1 means that the project is over budget.
Therefore in above example CPI is 1.66,Hence project is performing well.
Schedule Performance Index (SPI)
• Schedule performance index (SPI) is part of a greater project performance measurement method called
earned value management (EVM).

• Schedule performance index (SPI) is a measure of how close the project is to being completed compared to
the schedule.

• This index ratio it is calculated by dividing the budgeted cost of work performed, or earned value, by the
planned value.

• A schedule performance index should be calculated at regular intervals throughout a project.

• Falling behind schedule is one of the top causes of project failure, and creating an SPI is a simple way to be
proactive.
 Schedule Performance Index (SPI)
• For example:
• A project has a budgeted cost of Rs 120,000. According to the schedule, 15% of the
project should have been completed after one month (planned value). That is Rs
120,000 x 15 / 100 = Rs 18,000.But after a month, only 12% of the project has
actually been completed (earned value). That is Rs 120,000 x 12 / 100 = Rs14,400.
• SPI = Earned Value / Planned Values = 14,400 / 18,000 = 0.8
• This means that for every estimated hour of work, the project team is only
completing 0.8 hours (just over 45 minutes).
• Significance
1. SPI > 1: Project is ahead of schedule; more work has been completed than
expected
2. SPI < 1: Project is behind schedule; less work has been done than planned
3. SPI = 1: Project is on schedule; earned value and planned value are equal