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# EVM in Software Project Management

## Earn Value Management methodology

Earn Value Management is a methodology that integrates Schedule, Cost and Scope to measure the project performance.

It would be better to understand things with the help of a practical Example, We have a project-based scenario we will take that scenario as a question and solve it according to the rules of EVM.

**Example:**

**Solution:**

Few abbreviations to understand before jumping into the solution for proper understanding.

### Moving towards the actual solution now:

```
BAC = (10months x $1000) = $10,000
PV = $6000 AND AC = $6750
EV = (Work_Completed_Percentage x BAC)
EV = 55% X $10,000 = $5500
**COST:**
CV = (EV-AC)
CV = ($5500 - $6750) = -$1250
CV = -$1250 (***Over planned cost***)
CPI = (EV/AC)
CPI = ($5500/$6750) = 0.81 (***Over planned cost***)
CV% = (CV/EV)
CV% = (-1250/5500) = -23% (***Over planned cost***)
--------------------------------------------------------------------------
Note:
**CV** : **+** = under planned cost | **0** = on planne cost | **-** = over planned cost
**CPI** : >1 = Under planned cost | 1 = on Planned cost | <1 = over planned cost
--------------------------------------------------------------------------
**SCHEDULE:**
SV = (EV-PV)
SV = 5500- 6000 = -$500 (***Behind Schedule***)
SPI = (EV/PV)
SPI = 5500/6000 = 0.92 (***Behind Schedule***)
SV% = (SV/PV)
SV% = (-$500/$6000) = -$8% (***Behind Schedule***)
```

```
**Estimate month ahead/behind at time now = -0.5 Month
Formula = (SV% x Duration_to_time_now)
Formula = (-8% x 6) = -0.48 in Rouding -0.5
Estimate month ahead/behind end of the project = -0.8 months
Formula = (SV% x Duration_to_end_project)
Formula = (-8% x 10) = -0.8 months**
```

```
**Estimated total cost of Completing all the work
There are three different formulas to calculate the estimated total cost of completing
all the work.
1.EAC,** if CPI is the same for reminder of the project
EAC = (BAC/CPI) = $12,273
2.**EAC**, for future work done at the planned rate
EAC = (AC+BAC-EV) = $11,250
3.**EAC,** if both CPI and SPI Influence the remaining work
EAC = AC + (BAC-EV)/(CPI x SPI) = $12,789
```

These notes are from the YouTube based channel www.youtube.com/SoftwareEngineering about the EVM topic of software project management, In case if you want its complete video explanation you can watch its video lecture here Link: https://youtu.be/b8qgHkH3Cic

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