cumulative cost curves

Understanding Cumulative Cost Curves.
The three variables BCWS, BCWP and ACWP should be plotted graphically as the project progresses. Note that the solid curves represent actual data and the dotted curves represent projections. It is these 'cumulative cost curves' that enable analysis of the project to be undertaken at any point in time. Only the BCWS curve can be plotted in advance, the other two cumulative cost curves are normally plotted on a weekly or monthly basis.
The ACWP curve is plotted by measuring the actual work done as recorded on timesheets.
The BCWP can be calculated by multiplying the assessed percentage complete by the budget (BCWS).

Establishing Cost Variance.
The cost variance can be established at any point in time by referring to the difference between ACWP and BCWP. Remember, cost variance is a measure of the deviation between the earned value and the actual cost of the work performed.

Schedule Variance – Cost.
The schedule variance (cost) can be established at any point in time by referring to the difference between BCWS and BCWP. Remember, schedule variance is a measure of the deviation between the actual progress and the planned progress. This variance is normally converted to a percentage value to avoid representing the schedule variance in cost units.

Schedule Variance – Time.
The schedule variance (time) can be established at any point by referring to the difference between BCWS and BCWP - but with reference to the horizontal axis.

Monitoring Efficiency.
In addition to calculating the cost and schedule variances earned value analysis can also supply figures that quantify how efficiently the project is progressing. The formulae on this page provide feedback on performance efficiency in relation to the Budgeted Cost of Work Performed. An index value of 1 indicates that the project is entirely in line with the plan. An index value >1.0 indicates exceptional project performance. An index value < 1.0 indicates performance below planned expectations.

Budget Variance.
As a project progresses it is usually important to monitor the overall costs of the project in relation to the original budget. Budget variance is a key measure of the
anticipated cost of the whole project at some time after project initiation. Once again a negative value indicates a budget overrun.
ECAC, or Estimated Cost at Completion is a revised prediction of how much the project will cost (it takes into account the money spent so far and your current estimate of the total resources required to complete the project). BCAC, or Budgeted Cost at Completion is the original budget for the whole project.

Monitoring Progress.
One of the most important benefits of EVA is the calculation of the overall percentage complete of either a complete project or sub-project. This is obtained by dividing the total earned value, which is the sum of all the individual earned values, by the original budget. It is this variable together with the predicted final cost and cost variance that will be of most interest to senior management.

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