2.8.1 planned and actual cost performance), which are

2.8.1        Variance ReportsThreshold Management is based onan offset that is linked to Schedule Variance and Cost Variance. When SV and/orCV exceeds its threshold, formal Variance Reports need to be prepared. Thefollowing are examples of variance reports: 2.

8.1.1       Schedule VarianceSchedule Variance (SV) isthe difference between Earned Value (EV) and the Planned Value (PV) or thedifference between work performed and the work scheduled. A positive value is afavourable position.·        Calculation:SV = EV – PV·        PositiveSV = more work has been accomplished than scheduled.·        NegativeSV = less work completed than planned.

 2.8.1.2       Cost VarianceCost Variance (CV) is thedifference between the Earned Value and the Actual Costs or the differencebetween Budgeted Cost of Work Performed (BCWP) and Actual Cost of WorkPerformed (ACWP). A positive value is a favourable position.·        Calculation:CV = EV – AC·        PositiveCV = the work accomplished cost less than budgeted.

·        NegativeCV = the work accomplished cost more than budgeted.2.9  Analysis andManagement ReportsTo identify significant variances, projectthresholds (based on SV and CV) are agreed and setup on a project.Identify, at least monthly, the significantvariances (differences between both planned and actual schedule performance,and planned and actual cost performance), which are higher than agreedthresholds. Explanations and corrective actions are provided for the significantvariances by Discipline Project Manager or Package Engineers.Comparing the earned value to the planned valueduring a given period provides a valuable indication of schedule status interms of work accomplished. However, this schedule variance (SV) may notclearly indicate whether scheduled milestones are being met, since some workmay have been performed out of sequence or ahead of schedule, while other workhas been delayed.

Best services for writing your paper according to Trustpilot

Premium Partner
From $18.00 per page
4,8 / 5
4,80
Writers Experience
4,80
Delivery
4,90
Support
4,70
Price
Recommended Service
From $13.90 per page
4,6 / 5
4,70
Writers Experience
4,70
Delivery
4,60
Support
4,60
Price
From $20.00 per page
4,5 / 5
4,80
Writers Experience
4,50
Delivery
4,40
Support
4,10
Price
* All Partners were chosen among 50+ writing services by our Customer Satisfaction Team

Schedule Variance alone does not indicate whether a completedactivity is a critical event or if (or by how much) delays in an activity’scompletion will affect the completion date of the project.A formal project schedule will provide the meansfor clearly determining the status of specific control accounts (or lower-levelwork packages), milestones, and critical events. Schedule analysis willconsider the timeimpact to the schedule plan when a significant variance exists. By consideringthe time impact for each significant variance, a true and representative impactto the schedule plan is quantified.

Comparingthe earned value to the actual cost of that work provides a valuable indicationof the cost efficiency of work accomplished. This cost variance (CV) providesmanagement an indicator of actual cost problems and may be trended to seefuture cost impacts. Only variances that have a significant impact (higher thanthreshold) should be analysed in detail.