Cost Management Terms. Part – 8: Project Cost Management
Earned Value: The value the spent money brought to the project. Just like double entry accounting system: for every debit to an account there is a corresponding credit.
Budgeted at Completion (BAC): How much was originally planned for this project.
Planned Value (PV): Calculates how much of the project should be complete at a certain date according to the plan. Planned Value = Planned%complete*BAC
Earned Value (EV): How much is actually done during a period. EV=Actual%Complete*BAC
Actual Cost: Money spent over the period
Cost Variance (CV): Difference between planned cost and actual cost. CV = EV – AC
Schedule Variance (SV): Difference between the planned schedule and actual schedule (as:Where the project is in the schedule). SV=EV-PV
Cost Performance Index (CPI): The rate at which the project cost is performing regarding cost expectations. CPI is done for a given period of time. CPI = EV/AC
Cumulative CPI: It’s the CPI from the project start time to a particular point in time. CCPI = CEV/CAC
Schedule Performance Index (SPI): The rate at which the project is performing in respect of schedule expectations up to a point in time. SPI=EV/PV
Estimate at Completion (EAC): Forecast the total cost at project completion based on the project performance up to a point in time. EAC = BAC/CCPI
Estimate to Completion (ETC): How much more will be spent to complete the project based on past performance.
Variance at Completion (VAC): Difference between what was budgeted and what will actually be spent. VAC = BAC – EAC
Project managers need to calculate these values to get a good understanding of the project cost. He can get answers to questions like: How much is spent? How much more are required? Is the project progress satisfactory in terms of cost? — these will ultimately help in project cost control.
From: http://sitestree.com/?p=11508
Categories:PMP – Project Management
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Post Data:2017-10-17 16:20:59
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