Earned Value Management

EVM uses three key measurements: Planned Value (PV — what was planned to spend), Earned Value (EV — the value of work actually completed), and Actual Cost (AC — what was actually spent). From these, performance indices and forecasts are calculated. Key formulas include: SPI = EV/PV (schedule performance), CPI = EV/AC (cost performance), EAC = BAC/CPI (estimate at completion), and ETC = EAC − AC (estimate to complete). SPI and CPI values below 1.0 indicate underperformance. EVM is heavily tested in the PMP® exam and is one of the most powerful tools for early detection of cost and schedule variances.