Sample PMP Questions of Earned Value Management with Answers

Before proceeding, hopefully you already know the formulas for Earned Value Management technique, if not, check out this two videos,

• Earned Value Management Technique Formulas
• Earned Value Management Technique Formulas and Explanations

Below are some sample PMP questions based on EVM,

Q1. You are the project manager on a project that has $800,000 software development effort. There are two teams of programmers that will work for six month for a total of 10,000 hours. According to the project schedule your team should be done with 38% of the work. As of today, the project is 40% complete while 50% budget has been used. Calculate and share your conclusion

BAC = $800,000 (given)

AC = $400,000 (50% budget used)

PV = BAC * Planned % Complete
= 800,000 * 38 = $304,000

EV = BAC * Actual % Complete
= 800,000 * 40 = $320,000

CV = EV – AC
= 320,000 – 400,000 = -80,000

CPI = EV / AC
= 320,000 / 400,000 = 0.8

SV = EV – PV
= 320,000 – 304,000 = 16,000

SPI = EV / PV
= 320,000 / 304,000 = 1.05

Since CPI is less than 1, the project is over budget

And since SPI is more than 1, the project is ahead of schedule

In conclusion, as a Project Manager you should try to the project costs. Note that there is a concept known as Value Analysis that seeks to cut costs on the same project scope

Q2. Your project is scheduled for 2 years. There are six different teams working on five major functional areas. Some teams are ahead of schedule while others are falling behind. There are cost overruns in some areas but you’ve also saved costs in others. Due to all this, it is difficult to understand whether you are over or under budget. Nine months into the project, while the total project budget is $4,200,000, you’ve already spent $1,650,000. CPI is 0.875. Can you perform EV analysis and forecast

EAC = BAC / CPI
= 4,200,000 / 0.875 = 4,800,000

ETC = EAC – AC
= 4,800,000 – 1,650,000 = 3,150,000

VAC = BAC – EAC
= 4,200,000 – 4,800,000 = -600,000

Since the Variance At Completion is negative, the project will be over budget at completion by $600,000

Q3. BAC is $40,000 and EAC is $30,000, EV is $17,000 and AC is $15,000. What is the BAC-based TCPI

TCPI = BAC – EV / BAC – AC
= 40,000 – 17,000 / 40,000 – 15,000
= 23,000 / 25,000
= 0.92

Another formula for TCPI is based on EAC. Since the value of EAC is present in the question, lets try to apply that as well,

TCPI = BAC – EV / EAC – AC
= 40,000 – 17,000 / 30,000 – 15,000
= 23,000 / 15,000
= 1.53

Check more articles on Cost Management