Earned Value Report, Essay Example

Abstract

This Earned Value Report is in reference to a luxury home construction project. The following breaks down the cost analysis and scheduling associated with earned value management measurement data for the project. The project was executed with a budget of 3 million dollars over the project duration and budgetary goals as well as milestones were reasonably met within a 25% variance of change. The following will go into greater detail about the project factors and how the project benefits from EVM.

Keywords: Eva measures, milestone, 25% variance

EVM benefits 

One of the most common hurdles project managers must overcome is performance management. It’s an issue applicable to virtually every type of project. This ties into concerns associated with schedule and cost overruns, which often arise unexpectedly when sound earnings value management (EVM) plans are not implemented. Through proper use of EVM, project managers can adequately assess the performance level and health of a project through its entire duration. The benefits of EVM, specifically for this luxury home construction project, are vast. For starters, EVM allows the project manager to integrate schedule, cost, and technical aspects of a project for optimum performance and efficiency. This type cross-sectionalism results in project plans that are universally milestone and task conscious, limiting variance to more manageable conditions within an expected budget or schedule duration. Often with housing construction projects, if they are not planned in an intuitive way that is conscious of priority tasks and the possibility of their duration and deadlines overlapping with respective milestones that might rely on the completion of said tasks, it can not only result in deadline overrun but other aspects of the project being put on hold altogether. This is counterproductive and EVM provides a cost effective and deadline conscious alternative.    The main way the luxury home construction project benefits from EVM is through the ability to identify key factors impacting project completion (Marshall,2007).

Milestone

4.6 Install 2^nd floor joists complete.

The reason why I pick this milestone is it is after 20% tasks are completed,   the final tasks within this milestone entail the completion of roof framing and to conduct a framing inspection, it sets the foundation for the next milestone which involves floor sheathing.

Project statistics

Current duration: 168d, Current cost: $90,375.56

Baseline duration: 154d, Baseline cost: $89,135.56

Percent complete: duration 36%, work 28%

The baseline duration is 154 work days, but the current duration is 168 word days. There also has a cost variance, the extra $1240 is needed at completion.   The project has completed 28% of its total work with 36% of its duration.

EVM measures

When the total budget is distributed across the total work days required, the cost variance comes out to $1240, due to the fact that the AC = $23,963.56 and the EV = $22,723.56. The luxury home project has a cost variance (CV) greater than 0 for most milestones which means the project is currently under budget for most milestones.

CPI

The cost performance index (CPI) is calculated by taking the earned value and dividing it by the actual value from CPI. For the luxury home project the data on the Gantt chart and work breakdown structure reveals that the CPI for the project so far is less than 1 at a rate of 0.95. This means the project will be over budget but not that much.

EAC

The estimate at completion is used to identify potential deviation from the performance baseline for the project. Statistics of the project up to its current point of completion were utilized to assess  possible future results. For the luxury home project the data on the Gantt chart and work breakdown structure reveals that the EAC for the project so far is $93,999.59.

SV

When the total duration is distributed across the total work days required, the schedule variance comes out to -$6,240, due to the fact that the EV = $22,723.56 and the PV = $28, 963.56. The luxury home project has a schedule variance (CV) less than 0 for most milestones which means the project is currently behind schedule for most milestones.

SPI

The schedule performance index (SPI) is calculated by taking the earned value and dividing it by the planned time from SPI. For the luxury home project the data on the Gantt chart and work breakdown structure reveals that the SPI for the project so far is less than 1 at a rate of 0.78. This means the project will be behind the schedule.

VAC

The forecasted cost variance comes out to -$4,864.03, due to the fact that the BAC= $89,135.56 and EAC = $93,999.59. The negative number indicates that the project will be completed over budget.

EVM interpretation

Regarding to the data above,  the CPI is 0.95 and less than 1 which means the project will be over budget but not that much, the SPI is 0.78 and less than 1 which means the project will be behind the schedule.  From the CV and SV, it shows that the project is $1240 over budget and  worth $6,240 works was scheduled to be done but has not been accomplished. I estimate the project will not be complete by the deadline and  resulting in unexpected costs.

EVM conclusions and recommendations

According to the EVM measure, the project is a little bit over budget now, but the main problem is it is behind the schedule so bad, some of the tasks was scheduled to be completed but not yet. In my opinion, it is necessary to reduce the duration of some non-critical tasks to keep the project on track, for example, we can reduce the duration of the task 2.1 clear and grub lot from 3 days to 2 days.

Milestone

5.8 Dry In complete.

The reason why I pick this milestone is the Dry In  milestone entails the installation of sheathing on all floors as well as the installation of the aspects of the exterior of the home like the roof decking and the exterior doors, flashing and shingles.

Project statistics

Current duration: 169d, Current cost: $92,655.56

Baseline duration: 154d, Baseline cost: $89,135.56

Percent complete: duration 49%, work 44%

The baseline duration is 154 work days, but the current duration is 169 word days. There also has a cost variance, the extra $3520 is needed at completion. The project has completed 49% of its total work with 44% of its duration.

EVM measures

CV

When the total budget is distributed across the total work days required, the cost variance comes out to $3520, due to the fact that the AC = $38,539.56 and the EV = $35,019.56. The luxury home project has a cost variance (CV) greater than 0 for most milestones which means the project is currently under budget for most milestones.

CPI

The cost performance index (CPI) is calculated by taking the earned value and dividing it by the actual value from CPI. For the luxury home project the data on the Gantt chart and work breakdown structure reveals that the CPI for the project so far is less than 1 at a rate of 0.91. This means the project will be over budget but not that much.

EAC

The estimate at completion is used to identify potential deviation from the performance baseline for the project. Statistics of the project up to its current point of completion were utilized to assess  possible future results. For the luxury home project the data on the Gantt chart and work breakdown structure reveals that the EAC for the project so far is $98,095.04.

SV

When the total duration is distributed across the total work days required, the schedule variance comes out to -$6,240, due to the fact that the EV = $22,723.56 and the PV = $28, 963.56. The luxury home project has a schedule variance (CV) less than 0 for most milestones which means the project is currently behind schedule for most milestones.

SPI

The schedule performance index (SPI) is calculated by taking the earned value and dividing it by the planned time from SPI. For the luxury home project the data on the Gantt chart and work breakdown structure reveals that the SPI for the project so far is less than 1 at a rate of 0.78. This means the project will be behind the schedule.

VAC

The forecasted cost variance comes out to -$4,864.03, due to the fact that the BAC= $89,135.56 and EAC = $93,999.59. The negative number indicates that the project will be completed over budget.

EVM interpretation

Regarding to the data above,  the CPI is 0.95 and less than 1 which means the project will be over budget but not that much, the SPI is 0.78 and less than 1 which means the project will be behind the schedule.  From the CV and SV, it shows that the project is $1240 over budget and  worth $6,240 works was scheduled to be done but has not been accomplished. I estimate the project will not be complete by the deadline and  resulting in unexpected costs.

EVM conclusions and recommendations

According to the EVM measure, the project is a little bit over budget now, but the main problem is it is behind the schedule so bad, some of the tasks was scheduled to be completed but not yet. In my opinion, it is necessary to reduce the duration of some non-critical tasks to keep the project on track, for example, we can reduce the duration of the task 2.1 clear and grub lot from 3 days to 2 days.

Summary

Based on the fact that the luxury home construction project is still in the initial stages of establishing general conditions, it is difficult to get  a fix on how potential tasks and milestones will play out within a sound EVM strategy. It is clear however that, the project to date is still under budget as the cost variance does not appear volatile within the time restraints and required resources, retaining it within a 25% range of variance and the cost performance index is currently above 1 establishing the current project costs on a trajectory that should keep it below budget. All of this suggest that the earned value, planned value, and actual value of the luxury home construction project should have little deviation from one another.