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Define the basic elements used to calculate EVM measures: earned value (EV), planned value (PV), actual cost (AC), and budget at completion (BAC) and where you would find them in project documentation

Define the basic elements used to calculate EVM measures: earned value (EV), planned value (PV), actual cost (AC), and budget at completion (BAC) and where you would find them in project documentation.

Answer:

Earned Value Management (EVM) relies on a few key elements to measure project health. Earned Value (EV) represents the value of work actually finished, essentially the budgeted amount "earned" based on completed tasks. Imagine your project divided into stages; EV tells you the value of stages achieved so far. Determining EV might involve a pre-defined formula based on completion percentage and budgeted value of a specific activity, or project managers might use expert judgment for complex tasks.

Planned Value (PV) reflects the budgeted amount allocated for work scheduled to be completed by a specific time. It's the benchmark you compare actual progress against. Think of it as the planned cost of reaching each project milestone. Finding the Planned Value usually involves calculations based on the project schedule baseline. It's the budgeted amount for each period multiplied by the scheduled percentage of work completion for that period. The sum of all Planned Values throughout the project equals the Budget at Completion (BAC).

Actual Cost (AC) is simply the total amount of money spent on the project up to that point, including all expenses like labor, materials, and equipment rentals. Tracking AC involves meticulous record-keeping by project teams, calculating the total amount spent at any given time.

The Budget at Completion (BAC) represents the total approved budget for the entire project. It's the final cost you expect to incur if everything goes according to plan.  Finding the BAC usually involves looking at the project charter, budget, or scope baseline, where the total project cost is typically documented and established during project planning. This fixed value serves as the reference point for all other EVM calculations.

Project management information systems (PMIS) or project controls software are where EV, PV, and AC are typically tracked and reported. The BAC is documented in the project charter, budget, or scope baseline. By comparing these values, EVM helps assess project performance in terms of cost and schedule. Positive variances (EV > AC or EV > PV) indicate you're ahead of schedule or under budget, while negative variances suggest potential cost overruns or delays.