Earned Value Management in Depth: Master Project Cost Control and Performance Measurement

Question 1

Which component is NOT part of Earned Value Management (EVM)?

Accepted Answer

Return on Investment (ROI)

Answer

Planned Value (PV)

Answer

Earned Value (EV)

Answer

Actual Cost (AC)

Question 2

The Cost Variance (CV) metric in EVM is computed as:

Accepted Answer

EV - AC

Answer

PV - EV

Answer

AC - PV

Answer

EV - PV

Question 3

Which of the following is a significant limitation of EVM?

Accepted Answer

It demands accurate data collection.

Answer

It is appropriate only for large-scale projects.

Answer

It has no forecasting utility.

Answer

It can be employed solely by experienced project managers.

Question 4

Which option is NOT a use case for EVM?

Accepted Answer

Evaluating project managers

Answer

Measuring project progress and performance

Answer

Identifying cost overruns and underruns

Answer

Developing contingency plans for potential risks

Question 5

The Schedule Performance Index (SPI) metric measures:

Accepted Answer

Earned Value divided by Actual Duration

Answer

Total project duration divided by actual project duration

Answer

Planned Value divided by Earned Duration

Answer

Actual Duration divided by Earned Duration

Question 6

What is a potential limitation of using Earned Value Management (EVM)?

Accepted Answer

Increased complexity

Answer

Enhanced project oversight

Answer

Improved risk management

Answer

Reduced project flexibility

Question 7

Multiple Choice: What formula calculates Cost Variance (CV)?

Accepted Answer

CV = EV - AC

Answer

CV = PV - AC

Answer

CV = AC - EV

Answer

CV = AC - PV

Question 8

A project with a CPI of 1.0 indicates that:

Accepted Answer

The project is on track for both cost and schedule

Answer

The project is ahead of schedule but behind on cost

Answer

The project is behind schedule but ahead on cost

Answer

More information is required to determine project status

Question 9

A project with a Schedule Variance (SV) of -50% signifies that:

Accepted Answer

The project is behind schedule by 50%

Answer

The project is ahead of schedule by 50%

Answer

The project is on schedule

Answer

More information is required to determine project status

Question 10

The formula for calculating the Estimate at Completion (EAC) is:

Accepted Answer

EAC = BAC / CPI

Answer

EAC = AC / CPI

Answer

EAC = EV / CPI

Answer

EAC = PV / CPI

Question 11

The primary objective of Earned Value Management (EVM) is:

Accepted Answer

To evaluate and measure project performance

Answer

To forecast project cost and schedule outcomes

Answer

To optimize the allocation of resources

Answer

To generate detailed project reports

Question 12

How does Earned Value Management (EVM) contribute to the different stages of a project's lifecycle?

Accepted Answer

EVM provides ongoing insights into project performance, enabling timely adjustments throughout the lifecycle.

Answer

EVM is mainly used to summarize project performance after its completion.

Answer

EVM is primarily involved in defining project scope and objectives during the planning phase.

Answer

EVM is solely focused on estimating the project's final costs.

Question 13

The formula for calculating earned value (EV) is:

Accepted Answer

EV = (BAC x % Complete)

Answer

EV = (BCWP - ACWP)

Answer

EV = (ACWP + BCWP)

Answer

EV = (BAC - BCWP)

Question 14

The primary objective of the schedule performance index (SPI) is to:

Accepted Answer

Measure the efficiency of project execution against the planned schedule

Answer

Forecast the project completion date based on current progress

Answer

Assess the accuracy of project estimates

Answer

Compare the actual cost of work performed to the planned cost

Question 15

For successful Earned Value Management, which practice is usually discouraged?

Accepted Answer

Adjust EVM metrics to match individual project needs

Answer

Establish a clear, standard EVM process

Answer

Regularly train and support the project team on EVM

Answer

Involve stakeholders throughout the EVM process

Question 16

Which of the following is NOT a core component of Earned Value Management (EVM)?

Accepted Answer

Project Scope Management Plan

Answer

Actual Cost (AC)

Answer

Planned Value (PV)

Answer

Earned Value (EV)

Question 17

Identify a key performance indicator derived from EVM:

Accepted Answer

Cost Variance (CV)

Answer

Activity Duration

Answer

Resource Utilization

Answer

Project Scope

Question 18

What is the primary purpose of a baseline in EVM?

Accepted Answer

Establish a benchmark for contrasting actual performance

Answer

Define the scope of the project

Answer

Determine project costs

Question 19

Explain the distinction between Planned Value (PV) and Baseline Cost Estimate (BCE):

Accepted Answer

PV represents the planned value of completed work, while BCE encompasses the entire project's planned cost.

Answer

PV includes actual costs, while BCE does not.

Question 20

What is the purpose of a Variance Threshold in EVM?

Accepted Answer

Initiate corrective actions when performance significantly deviates from the plan

Answer

Calculate the project's earned value

Answer

Set the acceptable range of performance

Question 21

Which of the following is a recommended best practice for implementing EVM?

Accepted Answer

Engage stakeholders early in the process

Answer

Overlook performance deviations below a specific threshold

Answer

Utilize a complex and detailed data collection system

Question 22

Which of the following is NOT a benefit of using Earned Value Management (EVM)?

Accepted Answer

Reduces the need for accurate cost and schedule data

Answer

Improves communication and collaboration among project stakeholders

Answer

Provides early warning of potential cost and schedule overruns

Question 23

What is the purpose of a Variance Analysis Report (VAR)?

Accepted Answer

To analyze deviations from the project baseline and identify areas for improvement

Answer

To forecast project completion date and costs

Answer

To provide a visual representation of project progress

Question 24

The Cost Performance Index (CPI) measures:

Accepted Answer

Efficiency of cost usage

Answer

Quality of project deliverables

Answer

Accuracy of cost estimates

Answer

Effectiveness of project schedule

Question 25

The Forecast at Completion (FAC) is calculated using:

Accepted Answer

Estimate at Completion (EAC) / Cost Performance Index (CPI)

Answer

Planned Value (PV) / Actual Cost of Work Performed (ACWP)

Answer

Budget at Completion (BAC) / Schedule Performance Index (SPI)

Question 26

What is the purpose of the Earned Value Management System (EVMS)?

Accepted Answer

To integrate cost, schedule, and performance data to support project control

Answer

To manage project risks and uncertainties

Answer

To create a detailed project plan

Question 27

The To Complete Performance Index (TCPI) is used to:

Accepted Answer

Forecast the cost performance of the remaining work

Answer

Identify the root causes of cost overruns

Answer

Assess the overall project performance

Answer

Estimate the project's completion date