CE Board Exam Randomizer

⬅ Back to Construction Project Management Topics

Project Control and Earned Value

Earned Value Analysis (EVA) gives a snapshot of whether your project is on time and on budget. Three key numbers: PV (Planned Value — what work should be done by now), EV (Earned Value — what work is actually done, valued at the budget rate), and AC (Actual Cost — what you actually spent). Variances: CV = EV − AC (positive is under budget), SV = EV − PV (positive is ahead of schedule). Performance indices: CPI = EV/AC (>1 is efficient), SPI = EV/PV (>1 is ahead). The Estimate at Completion: EAC = BAC/CPI (most common). ETC = EAC − AC. TCPI = (BAC − EV)/(BAC − AC) tells you how efficiently you must work from now on.

$$CV=EV-AC, \quad SV=EV-PV, \quad CPI=\frac{EV}{AC}, \quad SPI=\frac{EV}{PV}$$
$$EAC=\frac{BAC}{CPI}, \quad ETC=EAC-AC, \quad TCPI=\frac{BAC-EV}{BAC-AC}$$

Cost and Schedule Performance

A project has $PV=100{,}000$, $EV=90{,}000$, and $AC=110{,}000$. Find $CV$, $SV$, $CPI$, and $SPI$.

$$CV=90{,}000-110{,}000=-20{,}000\quad(\text{over budget})$$
$$SV=90{,}000-100{,}000=-10{,}000\quad(\text{behind schedule})$$
$$CPI=\frac{EV}{AC}=0.818, \qquad SPI=\frac{EV}{PV}=0.900$$

Final answer: over budget (CPI < 1) and behind schedule (SPI < 1).

★ Interpreting Positive CV and SV

At the midpoint of a project: PV = P800,000, EV = P900,000, AC = P850,000. Interpret the project status in plain language.

$$CV=EV-AC=900{,}000-850{,}000=+50{,}000\quad(\text{under budget})$$
$$SV=EV-PV=900{,}000-800{,}000=+100{,}000\quad(\text{ahead of schedule})$$
$$CPI=\frac{900{,}000}{850{,}000}=1.059, \quad SPI=\frac{900{,}000}{800{,}000}=1.125$$

The project is under budget (spending less than planned for the work done) and ahead of schedule (more work done than planned). Both indices above 1.0 = good news.

★★ Estimate at Completion (EAC)

A building project has a Budget at Completion (BAC) of P5,000,000. To date: EV = P1,500,000, AC = P1,800,000. Calculate the Estimate at Completion assuming the current cost efficiency continues.

$$CPI=\frac{EV}{AC}=\frac{1{,}500{,}000}{1{,}800{,}000}=0.833$$

EAC assumes the rest of the project runs at the same CPI.

$$EAC=\frac{BAC}{CPI}=\frac{5{,}000{,}000}{0.833}=\text{P}6{,}002{,}400$$

Final answer: Estimated final cost ≈ P6,002,400 — about P1,002,400 over budget.

★★ Estimate to Complete (ETC)

Using the same project above (BAC = P5M, EV = P1.5M, AC = P1.8M, EAC = P6,002,400), how much more money is needed to finish the project?

ETC is the remaining cost from today to project completion.

$$ETC=EAC-AC=6{,}002{,}400-1{,}800{,}000=\text{P}4{,}202{,}400$$

Final answer: P4,202,400 more is needed to complete the project.

★★★ To-Complete Performance Index (TCPI)

A road project has BAC = P10,000,000, EV = P3,000,000, and AC = P3,500,000. Calculate the TCPI and explain what it means.

TCPI = (work remaining) ÷ (budget remaining). It tells you how efficiently you must spend from now on to meet the original budget.

$$TCPI=\frac{BAC-EV}{BAC-AC}=\frac{10{,}000{,}000-3{,}000{,}000}{10{,}000{,}000-3{,}500{,}000}=\frac{7{,}000{,}000}{6{,}500{,}000}=1.077$$

TCPI = 1.077 means you need to get P1.077 worth of work done for every P1.00 spent for the remainder of the project. Since the current CPI = 3M/3.5M = 0.857, achieving TCPI = 1.077 is very unlikely — the project will likely exceed its budget.

Scroll to zoom