What is Earned Value Management - EVM? PM in Under 5

Earned Value Management (EVM) is a project management tool developed by the US Department of Defence in the 1960s to track program performance. It is used to measure and manage performance by comparing budgeted and actual costs, and schedule performance. EVM uses four primary measures: Budget at Completion, Planned Value, Earned Value, and Actual Cost. It helps in understanding cost and schedule performance simultaneously and allows for forecasting project outcomes using indices like Cost Performance Index (CPI) and Schedule Performance Index (SPI).

What is the primary purpose of Earned Value Management (EVM)?

• To reduce the number of project tasks

• To delay project schedules

• To increase the budget of projects

• To track the performance of government programs

Which measure in EVM represents the total budgeted cost of a project?

• Earned Value

• Planned Value

• Budget at Completion

• Actual Cost

How is the Planned Value calculated in EVM?

• By multiplying the actual cost by the completed work

• By dividing the budget at completion by the total project cost

• By multiplying the budget at completion by the proportion of planned work

• By adding the earned value to the actual cost

What does the difference between budgeted cost and actual cost indicate in EVM?

• Schedule performance

• Cost performance

• Project duration

• Resource allocation

What is a key advantage of using Earned Value Management?

• It guarantees project success

• It focuses solely on cost performance

• It eliminates the need for project schedules

• It combines cost and schedule performance

Which of the following is a forecast that EVM can produce?

• Project team size

• Resource availability

• Project location

• Estimate to complete

What do the indices CPI and SPI stand for in EVM?

• Cost Planning Index and Schedule Planning Index

• Cost Performance Index and Schedule Performance Index

• Cost Process Index and Schedule Process Index

• Cost Projection Index and Schedule Projection Index