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Chapter 12 EARNED VALUE.Earned Value is a tool which enables project managers to determine where the project stands in relation to the budget and the schedule, even on projects with hundreds or thousands of activities, some of which are on track at any given time, while others are either ahead of schedule or behind. | Chapter 12 EARNED VALUE Earned Value is a tool which enables project managers to determine where the project stands in relation to the budget and the schedule even on projects with hundreds or thousands of activities some of which are on track at any given time while others are either ahead of schedule or behind. Since Earned Value refers to cost this concept could have been introduced in Chapter 7 with the other financial concepts. Or since Earned Value shows the status of the Schedule the concept could have been introduced in Chapter 8. But given that the main value is as a tool for project management this project management chapter seems to be the best place to cover this very important concept. In order to describe this concept we use the terms already mentioned in Chapter 7 BCWS- budgeted cost of work scheduled or PV - planned value BAC- budget at completion ACWP- actual cost of work performed or AC - actual cost EAC- estimate at completion The PMBOK Guide uses the terms PV and AC. Both terms are included here because some people use one version while others use the second version. Then we add some additional concepts related to the amount of work completed and the overall schedule and budget status BCWP- Budgeted cost of worked performed Earned Value CV- Cost variance - which is BCWP - ACWP SV- Schedule variance - which is BCWP - BCWS 220 Earned Value BCWP is also called Earned Value EV . Using this tool at any point in time we can evaluate the amount of work actually completed. Then we calculate the dollars that were budgeted for completing that work. The cumulative graph of these budgeted costs is the budgeted cost of work performed. Let s walk through this. First we have a list of project activities. For each of these activities we have a planned cost or the amount that we budgeted to complete that activity. And for each we have a start date and a finish date in the schedule. At any given point in time some activities will have started some will not and .
