A project is 3 months into a phase with PV $280,000, EV $250,000 and AC $295,000. What are the implications?

A project is 3 months into a phase with PV $280,000, EV $250,000 and AC $295,000. What are the implications?

• A. This project is behind schedule and over budget
• B. This project is on schedule but over budget
• C. This project is behind schedule but is within its budget
• D. This project is on track to deliver and is within its budget

Answer: (A)

In earned value management, you compare planned value (PV), earned value (EV), and actual cost (AC) to gauge schedule and cost performance. If EV is less than PV, you’re behind schedule. If AC is greater than EV, you’re over budget. Here, PV is 280,000, EV is 250,000, and AC is 295,000. EV < PV by 30,000 indicates you haven’t earned as much work as planned, so you’re behind schedule. AC > EV by 45,000 shows you’ve spent more than the value of the work actually completed, so you’re over budget. The performance indices reinforce this: SPI ≈ EV/PV = 250/280 ≈ 0.89 and CPI ≈ EV/AC = 250/295 ≈ 0.85, both below 1, signaling underperformance in both schedule and cost. Therefore, the correct implication is that the project is behind schedule and over budget. The other options would require EV to match PV (on schedule) or AC to be at or below EV (within budget), which isn’t the case here.

In earned value management, you compare planned value (PV), earned value (EV), and actual cost (AC) to gauge schedule and cost performance. If EV is less than PV, you’re behind schedule. If AC is greater than EV, you’re over budget.

Here, PV is 280,000, EV is 250,000, and AC is 295,000. EV < PV by 30,000 indicates you haven’t earned as much work as planned, so you’re behind schedule. AC > EV by 45,000 shows you’ve spent more than the value of the work actually completed, so you’re over budget.

The performance indices reinforce this: SPI ≈ EV/PV = 250/280 ≈ 0.89 and CPI ≈ EV/AC = 250/295 ≈ 0.85, both below 1, signaling underperformance in both schedule and cost.

Therefore, the correct implication is that the project is behind schedule and over budget. The other options would require EV to match PV (on schedule) or AC to be at or below EV (within budget), which isn’t the case here.