What is earned value analysis?

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Accepted Answer

Earned value analysis is a project management technique to measure project performance and progress.

Earned value analysis compares the planned value, earned value, and actual cost of a project.
Planned value (PV) is the budgeted cost of the work scheduled to be completed.
Earned value (EV) is the budgeted cost of the work actually completed.
Actual cost (AC) is the actual cost incurred for the work completed.
By comparing PV, EV, and AC, earned value analysis helps in assessing project performance and forecasting future outcomes.
Key metrics derived from earned value analysis include schedule variance (SV), cost variance (CV), schedule performance index (SPI), and cost performance index (CPI).
SV measures the deviation of the project schedule from the planned schedule.
CV measures the deviation of the project cost from the planned cost.
SPI indicates the efficiency of the project in terms of schedule performance.
CPI indicates the efficiency of the project in terms of cost performance.
For example, if a project has a SV of -10%, it means the project is behind schedule by 10%.
If a project has a CV of +5%, it means the project is under budget by 5%.
Earned value analysis helps in identifying project risks, making informed decisions, and taking corrective actions.

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