Formula needs updating for 2016 mpp
This reflects the current financial state of the project and is a very interesting figure for the payment plan.But it does not reflect how well the project is doing, as the stage of completion is not taken into consideration.
Earned Value Analysis (EVA) is a tool for controlling your project progress.
Key performance indicators (KPI) delineate the current schedule and cost situation.
To begin with we're going to create a simple calculation that will work out whether or not we've overspent on a task.
The fields will work like so: to finish creating the formula.
Real Cost Variance (CV = BCWP – ACWP) reveals the difference between actual costs and earned value. It can also be calculated in percent (CV% = [BCWP-ACWP]/BCWP) and thus is a figure that can be compared across projects.
Real cost variance can moreover be calculated as a Cost Performance Index (CPI = BCWP/ACWP): A CPI of 0.8 therefore reveals a cost increase whereas a CPI of 1.2 indicates a cost reduction.Earned value therefore represents the costs which according to the original planning would have been necessary to reach the stage of physical completion attained on the status date.Accordingly, unlike actual costs, earned value (EV) is a strictly financial factor representing the project’s current stage of physical completion.Earned value (EV) now establishes a relation between the stage of physical completion by the status date and the corresponding planned effort.This shows for the status date what effort was planned for the actual work performed.This is how it can determine the state of the project realistically and deduce a forecast for the future.