All PMP Cost Management Formulas (Earned Value Management – CPI, SPI, CV, SV, EAC, ETC, TCPI, VAC)

cost management formulas

Schedule Performance Index

SPI = EV/PV
EV = Earned Value
PV = Planned Value

< 1 behind schedule
= 1 on schedule
> 1 ahead of schedule

Cost Performance Index

CPI = EV/AC
EV = Earned Value
AC = Actual Cost

< 1 Over budget
= 1 On budget
> 1 Under budget

Schedule Variance

SV = EV-PV
EV = Earned Value
PV = Planned Value

< 0 Behind schedule
= 0 On schedule
> 0 Ahead of schedule

Cost Variance

CV = EV-AC
EV = Earned Value
AC = Actual Cost

< 0 Over budget
= 0 On budget
> 0 Within budget

Estimate At Completion, if original is flawed

EAC = AC+ETC
AC = Actual Cost
ETC = Estimate to Completion

if the original estimate is based on wrong data/assumptions or circumstances have changed ETC mentioned here is a ‘new ETC’

Estimate At Completion, if BAC remains the same

EAC = AC+BAC-EV
AC = Actual Cost
BAC = Budget at completion
EV = Earned Value

the variance is caused by a onetime event and is not likely to happen again

Estimate At Completion, if CPI remains the same

EAC = BAC/CPI
BAC = Budget at completion
CPI = Cost performance index

if the CPI would remain the same till end of project, i.e. the original estimation is not accurate

Estimate At Completion, if substandard performance continues

EAC = AC+(BAC-EV)/(CPI*SPI)
AC = Actual Cost
BAC = Budget at completion
EV = Earned Value
CPI = Cost Performance Index
SPI = Schedule Performance Index

use when the question gives all the values (AC, BAC, EV, CPI and SPI), otherwise, this formula is not likely to be used

To Complete Performance Index (TCPI)

TCPI = (BAC-EV)/ (BAC-AC)
BAC = Budget at completion
EV = Earned value
AC = Actual Cost

TCPI is basically – Remaining Work / Remaining Funds

< 1 Under budget
= 1 On budget
< 1 Over budget

If EAC is available use EAC-AC instead of BAC-AC

Estimate To Complete (ETC)

ETC = EAC-AC
EAC = Estimate at Completion
AC = Actual Cost

Variance At Completion (VAC)

VAC = BAC-EAC
BAC = Budget at completion
EAC = Estimate at Completion

Inference

For variances like SV, CV and VAC – negative is bad, positive is good

For indices like CPI and SPI – less than 1 is bad, more than 1 is good. However, the opposite is true for TCPI

Diagrammatic Representation

image - All PMP Cost Management Formulas (Earned Value Management - CPI, SPI, CV, SV, EAC, ETC, TCPI, VAC)

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