Earned Value (EV) has always been challenging to understand. EV covers 4 to 5 questions in the exam. I am going to narrate an example to explain this concept:

Q – A company ABC is hired to install underground pipes for water supply to metropolitan city. Total length is 9 km. The cost is $ 30/Ft. Project duration is 6 months. Today 2nd month is completed. The Company has installed pipes over 1.8 km. The Cost incurred is $ 185,000.

Calculate CV, CPI, SV, and SPI?

A – First need to calculate EV. EV is Budgeted cost multiplied by % complete i.e.

EV = Budgeted Cost x % Complete

The Cost to install one running foot of pipe is $ 30. The Total distance is 9 km. The Cost is expressed per running feet and distance is taken in Kilometer. So unit conversion is required. Convert cost and distance into the same unit. Therefore Budgeted Cost is

**Budgeted Cost = Total Cost (Some of PV)**

= $ 30/ft *9 km

= $ 98.425/m * 9000 m

= $ 885,825

**Budgeted Cost (BC) = $ 885,825**

1.8 km is complete so far. It means

% complete = 1.8/9

= 0.2

= 20 %

% complete = 20 %

EV = 885,825 x .20

Ev = 177,165

Now Calculate

1 – **Cost variance (CV):**

CV = EV-AC

= 177,165 – 185,000

= – 7,835

CV = – 7,835

2 – **Cost Performance Index (CPI):**

CPI = EV/AC

= 0.95

CPI = 0.95

3 **– Schedule Variance:**

SV = EV – PV (Planned Value)

= 177,165 – 295,275

= – 118, 120

SV = 118,120

4 – **Schedule Performance Index (SPI):**

SPI = EV/PV

= 177,165/295,275 = 0.6

**Project is cost overrun and behind schedule**

* One ft is 304.8 mm, one m to1000 mm.

**PV is calculated as: