What are the Schedule and Cost Variances?
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0:50 – Defining Schedule Variance or SV
2:35 – Defining Cost Variance or CV
4:25 – Exercise: Calculate SV and CV
In this presentation I will define the two variance parameters to describe the status of the project: Schedule Variance or SV and Cost Variance or CV.
The Schedule Variance provides the difference between the schedule baseline at a specific moment in time (t) or PV(t) with the completed deliverables or Earned Value at the same time or EV(t).
The Schedule variance is defined as the difference between the earned value and the planned value:
SV(t) = EV(t) – PV(t)
Basically, it provides the schedule information of the project by comparing what should have been completed (PV) with what has been competed (EV).
When the SV is larger than or equal to zero, the project is ahead of schedule or on schedule. The SV provides the “Schedule Position” of the project
The Cost Variance provides the difference between the created value or earned value EV(t) and the cost to create that value or the actual cost at a specific moment in time AC(t).
The Cost Variance is defined as the difference between the EV(t) and the AC(t):
CV(t) = EV(t) – AC(t)
Basically, it provides the cost information of the project by comparing what value has been completed (EV) with the cost to create that value (AC).
When the CV is larger than or equal to zero, the project is below or on budget. The CV provides the “Cost Position” of the project
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