What is Earned Value Management? | EVM | CV, SV, CPI, SPI, EAC, ETC, TCPI, VAC | PMP Exam

Earned Value Management or EVM is a systematic approach to analyze project status with respect to planned scope, planned schedule and planned cost. This is also referred to as Earned Value Analysis or EVA.
Reference Timestamps
0:15 Basics: Earned Value, Planned Value, Cost Variance (CV) and Schedule Variance (SV)
4:30 Cost Performance Index (CPI) and Schedule Performance Index (SPI)
8:21 EVM Terms: BAC, ETC, EAC, VAC, PMP
12:22 Forecasting: Scenario 1
15:12 Forecasting: Scenario 2
18:29 Forecasting: Scenario 3
20:43 Forecasting: Scenario 4
22:45 TCPI: To Complete Performance Index
25:15 Solved Problem #1
27:51 Solved Problem #2
This lesson addresses the following
- What is Earned Value Technique?
- What is Value in Earned Value Management?
- What is Earned Value (EV), Planned Value (PV) and Actual Cost (AC)?
- What is Schedule Variance (SV)?
- What is Cost Variance (CV)?
- How to calculate schedule variance (SV)?
- How to calculate cost variance (CV)?
- What is the Cost Performance Index (CPI)?
- What is the Schedule Performance Index (SPI)?
- What is Performance Management Baseline (PMB)?
- What is Budget at Completion (BAC)?
- What is Estimate at Completion (EAC) and Estimate to Completion (ETC)?
- How to calculate Estimate at Completion (EAC) and Estimate to Completion (ETC)?
- Why do we have multiple forecasting techniques in EVM?
- What is TCPI or To Complete Performance Index?
- Earned Value Management Questions
- Earned Value Management Formulas
- Earned Value Management Problems
Additional Lessons
1. Fixed Price Incentive Fee Contracts: • What is a Fixed Price ...
2. Firm Fixed Price Contracts: • What is a Firm Fixed P...
3. Cost Plus Incentive Fee Contracts: • Cost Plus Incentive Fe...
4. Time Value of Money: • What is Time Value of ...
5. NPV and IRR: • What is Net Present Va...
6. Benefit-Cost Ratio & ROI: • Benefit-Cost Ratio & R...
7. Straight Line Depreciation: • What is Straight Line ...
8. Double Declining Balance Depreciation: • What is Double Declini...
9. Sum Of Years Digits Depreciation: • Sum Of Years Digits De...
All the best with your PMP exam!!
[Schedule Variance]
Schedule Variance and Cost Variance
Schedule Variance in Project Management
Schedule Variance Formula
Schedule Variance Calculation Example
Schedule Variance Example
Schedule Variance Graph
Schedule Variance Formula with Example
[Cost Variance]
Cost Variance Analysis
Cost Variance Project Management
Cost Variance Formula
Cost Variance and Schedule Variance
[Schedule Performance Index]
Schedule Performance Index (SPI)
Schedule Performance Index Calculator
Schedule Performance Index PMP
Schedule Performance Index Formula
Cost Performance Index and Schedule Performance Index
[Cost Performance Index]
Cost Performance Index in Project Management
Cost Performance Index Example
Cost Performance Index Calculation
[Budget At Completion]
Budget At Completion Project Management
Budget At Completion Example
Budget At Completion Formula
Budget At Completion PMP
#SunnySensei #EarnedValueAnalysis #EVA #TCPI #PMP

[@sunny.sensei]

If you find this lesson helpful, please consider pressing the LIKE button and leaving a COMMENT. You can also contribute to my efforts by pressing the SUPER THANKS button. 🙏

[@mimiywan]

Very helpful and the simple example is excellent. The comment by the narrator, negative is bad, is the best! Thank you

[@sunny.sensei]

Negative is indeed bad 😊🙏

[@machmarady]

Thank you for your explanation. it makes me understand much better.

[@LivingOrganismFromMarsAndVenus]

Finally someone explained it in a nice and easy way.

[@kabresson]

Great explanation! I feel that I understand the concepts much better now - thank you! The simplified definitions of each term work well.

[@sunny.sensei]

Thank you for your encouraging feedback. All the best with your PMP exam!!

[@tesfayeyalew5563]

By how much deeper you know some thing, by so much simpler you explaint it. I witness that in this video !!!

[@sunny.sensei]

Thank you for your kind words 😊🙏

[@nickbadshah]

Very helpful course, but seriously drop the ads. Atleast 15 ads are there in the whole video and cant even skip those

[@sunny.sensei]

Thanks for your feedback. I am glad that you liked the lesson. The ads are indeed painful for the audience. Having said that, these ads help teachers like me to recover a small part of the cost incurred in creating these lessons. My best wishes to you!

[@samahmad9552]

Great simplified example and explanation. Kodus to you for taking time to do this and to share your knowledge with everyone. Top man and all.

[@sunny.sensei]

Thank you for your encouraging words. 🙏

[@Dan-hc7tu]

Oh man😀 this is the best video i have seen on this subject on youtube. Thanks sir. It help me a lot 🙏🙏

[@sunny.sensei]

Thank you for your encouraging feedback 🙏😊

[@naderreda2020]

The best explanation for EVM.... Thank you much

[@sunny.sensei]

I am happy that you like the lesson.

[@veeravenkata2448]

I am preparing for PMP actually I do not know about commercial terms, but after this video, I came to know about EAM, simply a wonderful explanation.

[@sunny.sensei]

All the best with your PMP exam preparations!!

[@milindshingade5387]

Excellent explanation. Thank you very much.

[@sunny.sensei]

You are most welcome, Milind 🙏

[@ramsassociates4177]

Great way of making other's to understand.

[@sunny.sensei]

I am glad you liked the lesson.

[@ericabui5961]

AMAZING EXPLANATION, THIS SHOULD BE REFERENCED EVERYWHERE INCLUDING PMBOK 6. Very abstracts concepts turned into very simple and practical knowledge.

[@sunny.sensei]

This is the best compliment ever. Thank you 😊

[@sunpav]

Thank you for the video, was able to understand EVM now.

[@sunny.sensei]

I am happy that you found the lesson helpful.

[@ihussain6]

Great explanation. It is very help full to understand EVM - Waiting for more on this with question and answers.

[@sunny.sensei]

Thank you, Iqbal, for your feedback.

[@mridulyadav9161]

Superb Explanation, very well clarified. Thank You!

[@sunny.sensei]

Thank you for your feedback. All the best with your PMP exam!

[@davidrahn4817]

Thank you for a clear and concise explanation of the EVM formulas. If I had to offer one area of correction for any future videos you might make.... Even though in the written form, money shows the "$" before the number or amount, we do not express $150 as "dollar 150", in English, we say "150 dollars." The verbal or spoken use puts the "dollars" after the amount.

[@sunny.sensei]

Thank you, David. I appreciate your feedback and kind suggestion.

[@arshadlove5361]

Excellent explanation sir.. mind blowing... Superb concept visualisation and explanation....

[@sunny.sensei]

Thank you for your feedback.

[@virginiasanchez3282]

The explanation was awesome! I thanks for creating this material.. Very helpful

[@sunny.sensei]

Thank you for such encouraging feedback. I am happy that you liked the lesson.

[@surbhimantri1]

Explained well. Simplicity at best.

[@sunny.sensei]

Thank you 🙏

[@tracy881]

Very helpful and easy to understand. thank you!

[@sunny.sensei]

I am glad that you liked this lesson. I am currently working on another lesson on Earned Schedule. This topic was recently introduced by PMI in PMBOK 6th edition. I will post the new lesson sometime this weekend. I hope you will like that too. All the best with your PMP preparations!

[@gouravmittal8783]

Very good explanation Sir

[@sunny.sensei]

Thank you for your feedback. I am happy that you liked the lesson.

[@satyadhanasiri8691]

Very well explained Sunny Sensei..

[@sunny.sensei]

I am glad to know that you liked the lesson. Thank you for your encouraging words.

[@HaraprasadSwain]

This is video is so fking excellent and simple. Great explanation Sunny. Thnks

[@ferozahmed5528]

Awesome explanation

[@sunny.sensei]

Thank you for your feedback. I am glad that you liked the lesson.

[@ravitej9300]

Superb explanation...thank you very much

[@sunny.sensei]

I am glad to know that you liked the lesson. All the best with your PMP exam!

[@englishlanguagelearning9672]

Concise explanation, Thank You

[@sunny.sensei]

I am glad that you liked the lesson.

[@amishkumar6711]

Excellent explanation!

[@sunny.sensei]

Thank you, Amish.

[@shreyashkhandwe9009]

very nice explaination

[@sunny.sensei]

Thank you for your feedback. I am glad you liked the lesson.

[@vivekpnice]

I knew that before but this video provides me more clarity on this topic kindly make a video on forecasting of ETC and EAC on monthly basis in excel, Thanks

[@sunny.sensei]

Thank you for your feedback, Vivek. I have noted down your request on "forecasting ETC/EAC using excel". I will look into this and hopefully, come up with a new lesson soon.

[@nizarworld2020]

Good video ever seen on cost subject.

[@sunny.sensei]

Glad it was helpful!

[@akarablagg6834]

Thank you!!!

[@sunny.sensei]

I am glad that you liked the lesson.

[@rmas869]

Wonderfully explained .... Perfect ... BZ Just a small correction. In initial EAC completion, since AC=150, so after 3 days, EAC=450 and not the 350. Accordingly few other calculations will also change. Nevertheless, this video has cleared the complete understanding of EVM technique. Thankyou

[@sunny.sensei]

I am happy to know that you liked the lesson. Thank you for your feedback. I think you are referring to the part of the lesson where I introduce some EVM related terms. The idea is to present an essence of these terms to the student. As you must have noted, the lesson later presents various approaches/models for forecasting. The project manager can well ignore each of these approaches and decide to go ahead with some other model. For example, the PM's model could be an industry specific model. If this happens, his EAC will also be different. So, in summary, the EAC at this point of time in the lesson was just a number with no specific model/calculation behind it. But for the PMP exam, we are bound by the specific approaches under EVM. Real life can be different. All the best!!

[@KaptainLuis]

Thank you!!

[@sunny.sensei]

You are most welcome! I am glad that you liked the lesson.

[@ahsanqureshi1595]

very helpful video - thank you

[@sunny.sensei]

I am glad that you liked the lesson. If time permits, have a look at these sample problems too. kzbin.info/www/bejne/iqXKk3eQl9qkm6c

[@robertarias2674]

In the first example, should not be the EAC=900? since t’he formula dictates EAC=BAC/CPI=300/0,3333 Thanks

[@sunny.sensei]

Thanks for the comment, Robert. Let me explain. There is no single precise way of forecasting. EVM suggested multiple forecasting methods but the project manager can tailor these to align with a specific project/industry or his experience. The approach mentioned by you is also valid and is covered in this lesson as Scenario #3 (18:32). Please have a look. Good luck with your PMP exam!

[@applelzy]

Hi, I am puzzled...care to enlighten me pls. At scenario one at 14:50", how to get the $260 (re-estimate of remaining work)? thanks

[@Ashutosh904]

Hello Sunny Sensei could you please explain how you got 260 as the re estimate of remaining work plz?

[@HajiKhan-kp8wy]

💐👍

[@sunny.sensei]

Thank you for your feedback.

[@ab2_3000]

What resources inform of books do you recommend for someone who wants to broaden their knowledge on this topic

[@sunny.sensei]

Unfortunately, I am not aware of any text book that systematically explains the topic. My lessons are based on PMBOK and information on Project Management Institute website. I have used my background in mathematics/engineering to further elaborate and simply the concepts. I hope you find this lesson useful.

[@johnson7516]

nice

[@sunny.sensei]

I am glad you liked the lesson.

[@girishjaiswal1377]

I have a doubt...at 19:35. How come the BODMAS is not used? How come EAC=BAC/CPI was arrived at?

[@sunny.sensei]

The calculations are as per the BODMAS. Let me explain in further detail. We have the equation EAC = AC + BAC/CPI - EV/EV x AC The third term on the right hand side has EV/EV which equals 1, so we get EAC = AC + BAC/CPI - 1 x AC => EAC = AC + BAC/CPI - AC Now, “plus” AC and “minus” AC on the right hand side cancel out, so we finally get EAC = BAC/CPI Hope this helps you understand the simplification method. All the best with your studies!

[@malsalihi1938]

Given a total quantity of 12000 CY of concrete to be placed, at a cost of $400/CY. At the 40% point, the contractor placed $21,600,000 worth of concrete. What is the CV? Can you help solve this problem. Thanks

[@engrasgharbadshah9247]

But in a primavera P6 we planned any activity with regards to duration, suppose pcc casting of slab is 30 days, so in a planned value in software is based on duration and here you are doing cpi and spi based on costings? Please explain technically? #Badshah

[@muhammadfakharhussain9823]

If the project is expected to be completed in 6 months at a cost of Rs. 50,000 per month and at the end of fourth month, the current Cost Variance of the project is -10,000 and the Schedule Variance is 15,000. Considering this information: 1. What is the expected cost needed to complete the remaining work, assuming that the rest of the work will be completed at the budgeted rate ? 2. What will be the Estimate at Completion ( EAC ), assuming that the CPI is expected to be the same for the remainder of the project ? I have solved part 1 and got AC=325000, EV=315000, CPI=0.9692 and SPI=1.05. Pls guide me if BAC will be 300000? Secondly, can ETC value be negative? For 2nd part, formula used will be BAC/CPI but I am confused what values will be used.

[@Itsme_1648]

24:01 I don’t understand “67% over budget”. I thought 0.33 * 100= 33% 😅

[@baljitsingh4166]

Iam not able to understand scenario 3.how u cancel act and Evt to cancel the formula

[@danilocarlos5689]

CPI = EV/AC so when he had EV/CPI he simplified and turned it into (EV/EV) x AC. EV/EV=1 so now you have AC + (BAC/CPI) - AC, The AC's cancel each other out cause one is positive and the other one is negative, leaving you with BAC/CPI

[@appsformyphone1273]

Does all this come on the exam? 😮

[@sunny.sensei]

Your comment made me smile. I can assure you that if you understand this lesson, you will be able to correctly answer all Earned Value questions in the PMP exam. Now to address your query, this lesson is not focused only on PMP exam. My goal is to impact broader practical understanding of the concept for practicing project managers. In summary, this lesson is much more than what is needed for PMP exam. Please try to go through this lesson patiently. All the best with your PMP exam!

[@engrasgharbadshah9247]

So what is basically difference between Earned value and Actual cost? In a graph plotted you take EV is 50$ and actual cost is 150$, so in 1 day duration our cost will be either 150$ which is actual cost or 50$ which earned value cost and what it indicates in a 1 day duration.? Secondly how you assume it? So basically what is then Earned value? And LOC means? Technically explain it

[@veeoby3364]

Why do you put the $ sign after the values?

[@kittyflier8338]

Nice course, but the accent makes me headache.

[@sunny.sensei]

I am glad that you liked the lesson. About the accent, I am not sure if I can do much about it. By the way, you also need to work on your English Language skills. “The accent gives me headache” is how you should have expressed yourself. Good luck with PMP and English 🙏

[@sameertawde5]

Mitra 260 kuthun alet