Imagine a graph where the x-axis represents time (in weeks, months, or any other suitable time unit) and the y-axis represents cumulative costs (in dollars, euros, or any other currency).
- Plotting the PV (Planned Value):
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- Start by plotting the PV, representing the cumulative planned costs over time. As mentioned, this curve typically has an S-shape. At the start, expenses are slow, then they pick up during the middle of the project, and finally, they slow down again towards the end.
- Plotting the EV (Earned Value):
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- Next, plot the EV, representing the cumulative value of the work completed by a certain time. If the project is on track, the EV curve will closely follow the PV curve. If the project is behind schedule, the EV curve will fall below the PV curve.
- Plotting the AC (Actual Cost):
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- Finally, plot the AC, representing the actual cumulative costs incurred by a certain time. If the project is within budget, the AC curve will closely follow the EV curve. If the project is over budget, the AC curve will rise above the EV curve.
Interpreting the Graph:
- EV and PV Comparison: The project is behind schedule if the EV curve is below the PV curve. If the EV curve is above the PV curve, the project is ahead of schedule.
- EV and AC Comparison: The project is over budget if the AC curve exceeds the EV curve. The project is under budget if the AC curve is below the EV curve.
- AC and PV Comparison: If the AC curve is above the PV curve, the project is spending more than planned, even if the work is on schedule.
Conclusion:
Graphical representation of PV, EV, and AC provides a visual snapshot of a project’s health concerning schedule and budget. Project managers can quickly identify potential issues by comparing these curves and take corrective actions. This visual tool is invaluable for stakeholder meetings, providing a clear and concise overview of project performance.
