A project manager is reviewing the performance of a critical work package. The earned value data shows a Planned Value (PV) of $25,000, an Earned Value (EV) of $22,000, and an Actual Cost (AC) of $24,000. Which statement accurately describes the work package's current status?
The work package is over budget and behind schedule.
The work package is under budget and ahead of schedule.
The work package is under budget and behind schedule.
The work package is over budget and ahead of schedule.
The correct answer is that the project is over budget and behind schedule. This is determined using Earned Value Management (EVM) calculations:
Cost Variance (CV) = Earned Value (EV) - Actual Cost (AC) = $22,000 - $24,000 = -$2,000. A negative CV indicates the project is over budget.
Schedule Variance (SV) = Earned Value (EV) - Planned Value (PV) = $22,000 - $25,000 = -$3,000. A negative SV indicates the project is behind schedule.
Therefore, the work package is both over budget and behind schedule. The other answers are incorrect as they misinterpret these fundamental EVM calculations.
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What is Actual Cost (AC) in project management?
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How does Actual Cost (AC) compare with Planned Value (PV) and Earned Value (EV)?
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