Operations and Supply Chain Management The Core

PROJECTS chapter 5 135
Earned Value Management Charts
exhibit 5.5
Chart A
Chart B
Budgeted Cost of Work Scheduled (BCWS)
Actual Cost (AC)
Budgeted Cost of Work Scheduled (BCWS)
Budgeted Cost of Work Performed (BCWP)
$200,000
$200,000
BCWS
$150,000
$100,000
$50,000
BCWS
AC
Project
Tracking
without
Earned Value
Is Inconclusive
$150,000
$100,000
$50,000
BCWP
Behind
Schedule
Schedule
Variance (Time)
Schedule
Variance ($)
$0
1 2 3 4 5 6 7 8
Time (weeks)
9
10 11 12
$0
1 2 3 4 5 6 7 8
Time (weeks)
9
10 11 12
Chart C
Chart D
$200,000
Budgeted Cost of Work Performed (BCWP)
Actual Cost (AC)
$200,000
Budgeted Cost of Work Scheduled (BCWS)
Budgeted Cost of Work Performed (BCWP)
Actual Cost (AC)
BCWS
$150,000
$150,000
$100,000
$50,000
BCWP
AC
Cost
Variance ($)
Underbudget
$100,000
$50,000
BCWP
AC
$0
1 2 3 4 5 6 7 8
Time (weeks)
9
10 11 12
$0
1 2 3 4 5 6 7 8
Time (weeks)
9 10 11 12
planned in detail, including a time-phased spend plan for all elements of work. This is
a case where the project is evaluated based on cost. Exhibit 5.5A shows the cumulative
cost budget for this project as a function of time (the blue line, labeled BCWS). It also
shows the cumulative actual cost of the project (red line) through week 8. To those unfamiliar
with EVM, it might appear that this project was overbudget through week 4 and
then underbudget from week 6 through week 8. However, what is missing from this chart
is any understanding of how much work has been accomplished during the project. If the
project was actually completed at week 8, then the project would be well underbudget and
far ahead of schedule. If, on the other hand, the project is only 10 percent complete at week
8, then the project is significantly overbudget and behind schedule. A method is needed
to measure technical performance objectively and quantitatively, and that is what EVM
accomplishes.
Project Tracking with EVM Consider the same project, except this time the project plan
includes predefined methods of quantifying the accomplishment of work. At the end of each
week, the project manager identifies every detailed element of work that has been completed,