Which method is used to assess performance by comparing earned value to planned value and actual cost?

Which method is used to assess performance by comparing earned value to planned value and actual cost?

• A. Earned Value Management.
• B. Risk assessment.
• C. Quality assurance.
• D. Benchmarking.

Answer: (A)

Earned Value Management integrates scope, schedule, and cost to measure project performance. It uses three quantities: planned value (the budgeted cost of the work scheduled), earned value (the budgeted cost of the work actually completed), and actual cost (what was actually spent). By comparing earned value to planned value you assess schedule performance—whether you’re delivering the planned work on time. By comparing earned value to actual cost you assess cost performance—whether you’re spending as planned. If EV is less than PV, you’re behind schedule; if EV is greater than PV, you’re ahead. If AC exceeds EV, you’re over budget; if AC is less than EV, you’re under budget. From these comparisons you can derive indices like CPI (EV/AC) and SPI (EV/PV) to quantify cost efficiency and schedule efficiency. This method is distinct from risk assessment, quality assurance, or benchmarking, which focus on different aspects of performance.

Earned Value Management integrates scope, schedule, and cost to measure project performance. It uses three quantities: planned value (the budgeted cost of the work scheduled), earned value (the budgeted cost of the work actually completed), and actual cost (what was actually spent). By comparing earned value to planned value you assess schedule performance—whether you’re delivering the planned work on time. By comparing earned value to actual cost you assess cost performance—whether you’re spending as planned. If EV is less than PV, you’re behind schedule; if EV is greater than PV, you’re ahead. If AC exceeds EV, you’re over budget; if AC is less than EV, you’re under budget. From these comparisons you can derive indices like CPI (EV/AC) and SPI (EV/PV) to quantify cost efficiency and schedule efficiency. This method is distinct from risk assessment, quality assurance, or benchmarking, which focus on different aspects of performance.