This original ITCertPath learning chapter supports concept review and scenario practice. Confirm final policies and exam details with PMI before your appointment.
Interpret earned value in plain language
Planned value is the authorized budget for scheduled work. Earned value is the authorized budget for completed work. Actual cost is what the completed work cost. Every formula becomes easier when these meanings are clear.
- CV = EV − AC; negative means over budget.
- SV = EV − PV; negative means less work completed than planned.
- CPI = EV ÷ AC and SPI = EV ÷ PV.
- TCPI shows the cost efficiency required to meet a target BAC or EAC.
Choose the forecast assumption
If the original estimate was flawed and future work can follow the planned rate, EAC may be AC + (BAC − EV). If current cost efficiency is expected to continue, EAC may be BAC ÷ CPI. If cost and schedule jointly influence remaining work, a CPI-and-SPI forecast may be appropriate.
BAC is $200,000, EV is $90,000 and AC is $100,000. CPI is 0.90. If that cost performance continues, EAC = BAC ÷ CPI ≈ $222,222. The forecast is above budget because the project earns $0.90 of planned value per $1.00 spent.
Use other calculations carefully
Communication channels equal n(n−1)/2, showing how coordination complexity grows. PERT expected duration is (optimistic + 4 × most likely + pessimistic) ÷ 6. These tools inform judgment; they do not replace risk analysis or stakeholder discussion.
- Distinguish precision from accuracy.
- State forecast assumptions explicitly.
- Use the correct units and round only at the end.
- Explain what a result means for the next decision.
Deep-dive lessons
Earned value worked example
Assume BAC is $400,000, PV is $200,000, EV is $180,000 and AC is $225,000. CV = EV − AC = −$45,000, so completed work cost more than its budgeted value. SV = EV − PV = −$20,000, so less work is complete than planned.
CPI = 180,000 ÷ 225,000 = 0.80 and SPI = 180,000 ÷ 200,000 = 0.90. If cost efficiency continues, EAC = BAC ÷ CPI = $500,000. ETC is $275,000 and VAC = BAC − EAC = −$100,000.
Three-point estimates and communication channels
For optimistic 8 days, most likely 14 and pessimistic 26, the PERT expected duration is (8 + 4×14 + 26) ÷ 6 = 15 days. The triangular average would be 16 days, so identify which formula the question requests.
With 8 people, potential communication channels are 8×7÷2 = 28. Adding two people creates 10×9÷2 = 45 channels—17 additional potential connections, not merely two.