Glossary of Earned Value Management Terms: Glossary of Earned Value Management Terms :: SAS/OR(R) 9.2 User's Guide: Project Management

Glossary of Earned Value Management Terms

Total costs incurred that must relate to whatever cost was budgeted within the Planned Value and Earned Value (which can sometimes be direct labor hours alone, direct costs alone, or all costs including indirect costs) in accomplishing work during a given time period.

Actual Cost of Work Performed

See Actual Cost.

B

Budget at Completion

The sum of the total budgets for a project.

Budgeted Cost of Work Performed

See Earned Value.

Budgeted Cost of Work Scheduled

See Planned Value.

C

CPI

See Cost Performance Index.

CV

See Cost Variance.

CV%

See Cost Variance Percentage.

Cost Performance Index (CPI)

The cost efficiency ratio of Earned Value to Actual Cost. CPI is often used to predict the magnitude of a possible cost overrun using the following formula: $\frac{bac}{cpi} =$ projected cost at completion. ${cpi} = \frac{ev}{ac}$ .

Cost Variance (CV)

The difference between the Earned value of an activity and the Actual Cost of that activity, i.e.,

Cost Variance Percentage (CV%)

Cost Variance relative to Earned Value: ${cv\%} = \frac{cv}{ev}$ .

E

EAC

See Estimate at Completion.

ETC

See Estimate to Complete.

EV

See Earned Value.

Earned Value

The physical work accomplished plus the authorized budget for this work. The sum of the approved cost estimates (may include overhead allocation) for activities (or portions of activities) completed during a given period (usually project-to-date). Previously called the budgeted cost of work performed (BCWP) for an activity or group of activities.

Earned Value Management

A method for integrating scope, schedule, and resources, and for measuring project performance. It compares the value of work that was planned, the value of work that was actually completed, and the amount of money that was actually spent, to determine if cost and schedule performance are as planned.

Estimate at Completion (EAC)

The expected total cost of an activity, a group of activities, or the project when the defined scope of work has been completed. Most techniques for producing the EAC include some adjustment of the original cost estimate, based on actual project performance to date. This metric is derived from the ETC as follows:

. See Estimate to Complete.

Estimate to Complete (ETC)

The expected additional cost needed to complete an activity, a group of activities, or the project. Most techniques for producing the ETC factor in the project performance to date. The revised ETC, or $etc_{rev}$ , is the cumulative cost from the status date to the project completion date, according to the revised schedule and costs. The other three formulations used in this document are as follows:

${etc}_{otd} = {bac} - {ev} \newline\newline {etc}_{cpi} = \frac{{bac}-{ev}}... ...pi}\newline\newline {etc}_{{cpi}x {spi}} = \frac{{bac}-{ev}}{{cpi} x {spi}}$

P

PV

See Planned Value.

Percentage Complete

The percentage of total earned value that has been accumulated for a project: ${percentagecomplete} = \frac{ev}{bac}$ .

Planned Value

The physical work scheduled, plus the authorized budget to accomplish the scheduled work. Previously, this was called the budgeted cost of work scheduled (BCWS).

S

SPI

See Schedule Performance Index.

SV

See Schedule Variance.

SV%

See Schedule Variance Percentage.

Schedule Performance Index (SPI)

The schedule efficiency ratio of Earned Value accomplished against the Planned Value. The SPI describes what portion of the planned schedule was actually accomplished. ${spi} = \frac{ev}{pv}$ .

Schedule Variance (SV)

The difference between the Earned value and the Planned value of the project at any point in time, i.e.,

Schedule Variance Percentage (SV%)

Schedule Variance relative to Planned Value: ${sv\%} = \frac{sv}{pv}$ .

T

TCPI

See To-Complete Performance Index.

To-Complete Performance Index (TCPI)

The cost of remaining work divided by the remaining budget or estimated budget: ${tcpi(bac)} = \frac{{bac}-{ev}}{{bac}-{ac}} \newline\newline {tcpi(eac)} = \frac{{bac}-{ev}}{{eac}-{ac}}$

V

VAC

See Variance at Completion.

VAC%

See Variance at Completion Percentage.

Variance at Completion (VAC)

The difference between the original budget and the current estimate at completion:

Variance at Completion Percentage (VAC%)

The Variance at Completion relative to the Budget at Completion: ${vac\%} = \frac{vac}{bac}$ .

W

WBS

See Work Breakdown Structure.

Work Breakdown Structure (WBS)

The project hierarchy.

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