Case Study: Assembling scooters

Earned Value Analysis Glossary


Planned Value (PV) or Budgeted cost of work scheduled (BCWS): This represents the baseline or project plan. It is what you intend to pay for work done in a specific time frame.

Earned Value (EV) or Budgeted Cost of Work Performed (BCWP): This represents what you should have paid for what you actually accomplished.  This is done by determining the work actually performed and assigning he budgeted cost to it.

Actual Cost (AC) or Actual Cost of Work Performed (ACWP):  This represents the actual pay for the work that was actually performed. (Note: EV is the budgeted cost of the work while AC is actual cost of the work.)

Budget at Completion (BAC): This represents the baseline cost that was planned for the job. It is how much you intend to pay for the job.

Estimated at Completion (EAC) : This is what you expect the job to cost when it is finished.(after the work begins).

Estimate to Complete (ETC): At any given point, this is how much more you will have to spend to complete the project.


Earned Value Analysis Formulae


Schedule Variance(SV) : EV-PV or BCWP – BCWS  - A negative number means you are behind schedule. A positive number means you are ahead of schedule. 0 means you are on schedule.

Cost Variance(CV) : EV-AC or BCWP-ACWP   A negative number means that you are over budget. A positive number means that you are under budget. 0 means you are on budget

Cost Performance Index(CPI) : EV/AC or BCWP/ACWP –This keys out how many cents worth of work one gets for every dollar spent . CPI>1 is good and CPI<1 are bad and CPI = 1 indicates on budget

Schedule Performance Index(SPI) : EV/PV or BCWP/BCWS – This keys out the rate of progress. SPI>1 is good which indicates ahead of schedule and SPI<1 are bad which indicates behind schedule and   SPI = 1 indicates on schedule.

Estimate at Completion(EAC) : BAC/CPI  - This compares the rate at which you planned to spend to the rate at which you are actually spending. If CPI=1 then EAC = BAC.

Estimate at Complete(ETC): EAC-AC- This keys out how many more dollars will be needed to finish the work. (Note EAC is the final cost of the project and ETC is how many more dollars you have to spend to finish the work from where you are right now)


Assembling a scooter

You have let a contract to assemble four scooters which will be exactly identical to each other. Each is budgeted to cost $2500 and is scheduled to take one week (5 days). 10 people are working on it. The scooters will be built one after another.

At the end of second day of the third week (day 12 of 20) the project status is:


Completion status

Cost status

scooter 1



scooter 2

80% complete


scooter 3

40% complete


scooter 4

Not started



The budget for assembling all the scooters is $2500*4 =$ 10000.



12 days at $ 500 per day  = $6000

You should have done $6000 worth of work.





100% of 5 days + 80% of 5 days + 40% of 5 days = 11 days at $500 = $ 5500

80% of 5 days = 4 days

40% of 5 days = 2 days

(5 days + 4 days + 2 days = total 11 days)

The work that you have done should have cost $5500


$2400 +$ 2600 + $1200 + $0 = $6200

The work that did cost $6200



$5500/$6200 = 0.887

You are getting 88.7 cents worth of work for every dollar spent. This measures your cost efficiency.



$5500/$6000 = 0.916

You are only making 91.6%. This measures your activity efficiency.


CV : EV - AC

$5500- $6200 = -$700

You are over budget by $700 at this point.


SV : EV - PV

$5500- $6000 = -$500

You are behind schedule by one day.



$2500 per week * 4 weeks




$10000/0.887 = $11274

It is going to require $1274 more to finish at this rate



$11274 - $6200 = $5074

You will need $5074 to finish the work.

Not now, later