How to Use EVM

1. Calculate Performance Indicators

• Cost Performance Index (CPI):
  • Formula: CPI = EV / AC
  • Interpretation: A CPI greater than 1 indicates cost efficiency, while a CPI less than 1 indicates cost overruns.
• Schedule Performance Index (SPI):
  • Formula: SPI = EV / PV
  • Interpretation: An SPI greater than 1 indicates the project is ahead of schedule, while an SPI less than 1 indicates delays.

2. Analyze Variances

• Cost Variance (CV):
  • Formula: CV = EV – AC
  • Interpretation: A positive CV indicates cost savings; a negative CV indicates cost overruns.
• Schedule Variance (SV):
  • Formula: SV = EV – PV
  • Interpretation: A positive SV indicates the project is ahead of schedule; a negative SV indicates delays.