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22 January 2015

Understanding Earned Value Management: Part 2 – Forecasting a Project

David A. Zimmer
David A. Zimmer, PMP
Chief Project Professor
American Eagle Group
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Understanding Earned Value Management:
Part 2 – Forecasting a Project


PMBOK® Guide Definition:

Earned Value Management (EVM): A methodology that combines scope, schedule, and resource measurements to assess project performance and progress.

Actual Cost (AC): The realized cost incurred for the work performed on an activity during a specific time period.

Planned Value (PV): The authorized budget assigned to scheduled work.

Earned Value (EV): The measure of work performed expressed in terms of the budget authorized for that work.

Budget at Completion (BAC): The sum of all budgets established for the work to be performed.

Estimate at Completion (EAC): The expected total cost of completing all work expressed as the sum of the actual cost to date and the estimate to complete.

Estimate to Complete (ETC): The expected cost to finish all the remaining project work.

Variance at Completion (VAC): A projection of the amount of budget deficit or surplus, expressed as the difference between the budget at completion and the estimate at completion.

Practical Definition:

Earned Value Management (EVM): A set of mathematical formulas for determining current project performance and progress and used to forecast anticipated results; strikes the greatest fear in PMP® aspirants seeking certification.

Actual Cost (AC): The amount of money spent to date on the project.

Planned Value (PV): The planned amount of money to be spent or the amount of progress expected to date on the project.

Earned Value (EV): The value earned or the progress made to date on the project.

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