I have discussed earned value management in detail and provided a short explanation of its three elements: Planned Value (PV), Actual Cost (AC), and Earned Value (EV).

Now we are going to look at these elements in detail, including mathematical calculations. Therefore, I request you to go through every step thoroughly; missing any step will make further calculations difficult to solve .

The calculations for finding Planned Value, Earned Value, and Actual Cost are simple, and once you understand them, the rest will be easy. Although I am going to explain them thoroughly, I suggest you obtain a good PMP exam reference book for further reading and practice questions.

Schedule Variance and Cost Variance are two important parameters in earned value management, helping you analyze the project’s progress, i.e. how are you performing in terms of schedule and cost.

In my previous blog posts I have discussed earned value management and its three basic elements.

If you have not read these blog posts, I suggest you read them first, then come back to this post. In this post I will discuss Schedule Variance and Cost Variance, which are determined with the help of earned value, planned value and actual cost.

Let us start with an example:

Suppose you are managing a construction project, and the client comes and asks you to update him about the current status and progress of the project.