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A project manager is reviewing her project performance. Her project has a BAC of $950,000 and is
currently 40 percent complete, though it
was scheduled to be 45 percent complete at this time. Her project has spent $387,526. Management
would like to know if there is a schedule
variance. What is the planned value for this project?
The planned value is the percentage of where the project should be times the budget at
completion. In this instance, it is 45 percent of the
$950,000. Here, it can be calculated as follows:
PV = 45% of BAC
= 0.45 * 950,000
= 427,500
Planned value (PV) is the authorized budget assigned to the schedule work to be accomplished for a
schedule activity or work breakdown
structure component. It serves as a baseline against which actual performance is measured. The
theory of planned value is of vital importance
to the project management team and it is important to keep careful track of this. The term planned
value can also be in some situations
referred to by the project management team and the project management team leader as the
budgeted cost of work scheduled (BCWS).
Answer option A is incorrect. -$47,500 is the schedule variance (SV = EV-PV).
Answer option B is incorrect. This is the schedule performance index (SPI = EV/PV).
Answer option D is incorrect. This is the cost performance index (CPI = EV/AC).