Final answer:
EVM measures like EV, CPI, SV, and EAC are essential for project performance assessment. EV is calculated by the work completed relative to the budget, CPI measures cost efficiency, SV assesses schedule progress, and EAC estimates the total cost at project completion using current performance data.
Step-by-step explanation:
The question at hand is asking for an explanation of how Earned Value Management (EVM) measures such as Earned Value (EV), Planned Value (PV), and Actual Cost (AC) can be calculated and used to assess project performance. These measurements allow project managers to understand the cost performance and schedule progress of their projects and make necessary adjustments.
Earned Value (EV)
EV is the measure of work performed expressed in terms of the budget authorized for that work. It is calculated by multiplying the percentage of completed work by the project's total budget.
Cost Performance Index (CPI)
The CPI is a measure of cost efficiency and is calculated by dividing EV by AC. A CPI value greater than 1 indicates that the project is under budget, while a value less than 1 indicates over budget.
Schedule Variance (SV)
SV indicates how much the project is ahead or behind schedule. It is calculated by subtracting PV from EV. A positive SV indicates a project ahead of schedule, and a negative SV indicates a project behind schedule.
Estimate at Completion (EAC)
EAC is an estimate of the project's total cost at completion. It is calculated by dividing the Budget at Completion (BAC) by CPI. This provides project managers a forecast of the final project costs based on current performance.