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  "description": "The PMI Visual Wall Batch 4 simplifies *Earned Value Management* into a visual system that links planned, earned, and actual progress. It helps teams read cost and schedule performance instantly — turning EVM metrics into clear, actionable insight for control and forecasting.",
  "path": "/pmi-visual-wall-batch-4/",
  "publishedAt": "2026-06-02T07:05:35.000Z",
  "site": "https://kevos.com",
  "textContent": "PMI Visual Wall — Batch 1: Foundation & PMBOK 7\n\n# PMI VISUAL WALL · BATCH 4\n\nSection 5 — Earned Value Management · Posters 14–15 🖨 Print / Save as PDF — A3 landscape Tip: in the print dialog set paper = A3, layout = Landscape, margins = None, \"Background graphics\" ON.\n\n## Batch 4 — Earned Value Management (Posters 14–15)\n\nThis batch covers **The Standard for Earned Value Management** : the three core measures and the variances/indices they produce, then the full forecasting family (EAC, ETC, VAC, TCPI). One worked example runs across **both** posters so every formula lands on the same numbers. Same anatomy as the rest of the wall, with a **green spine** for EVM. Print with the button above (A3, landscape, margins None, background graphics ON).\n\n**The one rule that unlocks EVM:** **EV starts every formula.** A _variance_ is a subtraction (EV − something); an _index_ is a division (EV ÷ something). Positive variance and index > 1 are always favourable.\n\nPOSTER 14\n\nSection 5 · Earned Value Management — The Engine\n\n## EVM Foundations: Measures, Variances & Indices\n\nEVM fuses **scope, schedule and cost** into one objective read of performance. Three measures — **PV, EV, AC** — produce two **variances** ($) and two **indices** (ratios). The golden rule: **EV starts every formula** ; subtract for a variance, divide for an index, and positive / > 1 is good.\n\n### Visual Map — The EVM S-Curve\n\nCumulative $ Time →  data date (now) PV — planned value (BAC = total PV) EV — earned value AC — actual cost  PV = 50k AC = 45k EV = 40k SV = EV − PV = −10k CV = EV − AC = −5k → behind schedule & over cost\n\nEV below PV ⇒ **behind schedule** ; EV below AC ⇒ **over budget**. The vertical gaps to EV _are_ the variances.\n\n### The Three Measures\n\nPV — Planned Value\n    budgeted cost of work **scheduled** (the baseline plan). Total PV = **BAC** , Budget at Completion.\nEV — Earned Value\n    budgeted cost of work **performed**. **EV = % complete × BAC.**\nAC — Actual Cost\n    actual cost of the work **performed** — what you really spent.\n\n### Variances ($) & Indices (ratios)\n\n**SV = EV − PV**\n+ ahead · − behind\n\n**CV = EV − AC**\n+ under · − over\n\n**SPI = EV ÷ PV**\n>1 ahead · <1 behind\n\n**CPI = EV ÷ AC**\n>1 under · <1 over\n\n### Worked Example\n\nItem| Value\n---|---\nBAC| $100k\nPV (planned 50%)| $50k\nEV (40% complete)| $40k\nAC (spent)| $45k\n**SV** = 40−50| **−$10k** behind\n**CV** = 40−45| **−$5k** over\n**SPI** = 40/50| **0.80**\n**CPI** = 40/45| **0.89**\n\n### Exam Concepts\n\n  * **Variances in $, indices are ratios.** EV is always first.\n  * Positive variance & index **> 1** = favourable.\n  * **EV = % complete × BAC.**\n  * **SV weakness:** measured in $, it drifts to 0 at the end even if late — pair it with the schedule network or SPI.\n  * Cost pair uses **AC** ; schedule pair uses **PV**.\n\n\n\n### Executive View\n\n  * **One integrated number** for scope + schedule + cost.\n  * Objective **early-warning** system — trends, not anecdotes.\n  * **CPI is famously stable** after ~20% complete — trust the trend.\n  * Reports up cleanly through program & portfolio.\n\n\n\n### Relationships\n\n  * Needs a sound **scope, schedule & cost baseline** first (Poster 6 baselines).\n  * Risk **reserves** sit inside/outside the baseline (Poster 12).\n  * Forecasting (EAC/ETC/VAC/TCPI) builds on these — Poster 15.\n\n\n\n### Industry Example\n\nCapital Project\n\n  * A $100k line-upgrade is 40% built but has consumed $45k by the planned-50% point: SPI 0.80 & CPI 0.89 flag it **behind and over** early enough to act.\n\n\n\n### Memory Hooks\n\n  * **\"EV is the hero — it opens every formula.\"**\n  * **Variance = minus, Index = divide** ; + and >1 are good.\n  * **Cost↔AC, Schedule↔PV** (C-A, S-P).\n\n\n\n60-sec Review Define PV / EV / AC Write SV, CV, SPI, CPI EV = ? × BAC Why SV in $ is weak Sketch the S-curve\n\nPMI Visual Wall · Poster 14 · EVM — Measures, Variances & Indices · original instructional design · A3 landscape\n\nPOSTER 15\n\nSection 5 · Earned Value Management — Forecasting\n\n## EVM Forecasting: EAC · ETC · VAC · TCPI\n\nPerformance to date predicts the finish. **EAC** forecasts the total cost, **ETC** the cost of what's left, **VAC** the projected over/under, and **TCPI** the efficiency you must now sustain to hit a target. Pick the EAC formula that matches your **assumption** about the remaining work.\n\n### Visual Map — Choosing Your EAC (assumption → formula)\n\nAssumption about the remaining work| EAC formula| Reading\n---|---|---\nCurrent variance was a **one-off** / atypical| **EAC = AC + (BAC − EV)**|  finish the rest at the **budgeted** rate\nCurrent **cost efficiency continues** (the default)| **EAC = BAC ÷ CPI**|  today's CPI holds to the end\nBoth **cost & schedule** pressure continue| **EAC = AC + (BAC − EV) ÷ (CPI × SPI)**|  schedule drag worsens cost\nOriginal estimate is **no longer valid**| **EAC = AC + bottom-up ETC**|  re-estimate the remainder\n\n### The Forecasting Family\n\nBAC\n    Budget at Completion — the baseline total (the plan).\nEAC\n    Estimate at Completion — forecast **total** cost.\nETC\n    Estimate to Complete — cost of the **remaining** work.\nVAC\n    Variance at Completion — projected **over/under** at the end.\nTCPI\n    To-Complete Performance Index — efficiency **needed** from here.\n\n### Core Formulas\n\n**ETC = EAC − AC**\nwhat's left to spend\n\n**VAC = BAC − EAC**\n+ under · − over at end\n\n**TCPI = (BAC − EV) ÷ (BAC − AC)**\nto still hit **BAC**\n\n**TCPI = (BAC − EV) ÷ (EAC − AC)**\nto hit the new **EAC**\n\n### Worked Example (same numbers)\n\nFrom Poster 14| Value\n---|---\nBAC / EV / AC| 100 / 40 / 45\nCPI / SPI| 0.89 / 0.80\n**EAC** = BAC/CPI| **$112.5k**\n**ETC** = EAC−AC| **$67.5k**\n**VAC** = BAC−EAC| **−$12.5k**\nEAC (cost×sched)| ≈ $129k\n**TCPI** →BAC| **1.09**\n\n### Reading TCPI\n\n  * TCPI = **work remaining ÷ funds remaining**.\n  * Compare to your **CPI** : TCPI **0.89 vs CPI 0.89** = on track.\n  * Here **TCPI 1.09 > CPI 0.89** → you must run **better than you ever have** → the BAC is likely **unrecoverable**.\n  * Response: re-baseline, de-scope, or accept the overrun.\n\n\n\n### Exam Concepts\n\n  * **ETC = EAC − AC** ; **VAC = BAC − EAC**.\n  * **EAC = BAC/CPI** is the default \"current-trend\" forecast.\n  * Know all **four EAC** formulas & their assumptions.\n  * **TCPI > 1** (and > CPI) = must tighten up; recovery is hard.\n\n\n\n### Executive View\n\n  * EAC & VAC answer the board's question: **\"Where will we land?\"**\n  * TCPI tells you if a **recovery target is realistic** before you promise it.\n  * Forecasts trigger **re-baselining** & funding decisions.\n\n\n\n### Industry Example\n\nCapital Project\n\n  * The $100k line upgrade now forecasts **$112.5k (EAC)** with a **−$12.5k VAC**. TCPI 1.09 says recovery to budget is unlikely → present a re-baseline + a de-scope option.\n\n\n\n### Memory Hooks\n\n  * **BAC=plan · EAC=forecast · ETC=what's left · VAC=the surprise.**\n  * **\"ETC peels AC off EAC.\"**\n  * **If TCPI > CPI, you're in trouble.**\n\n\n\n60-sec Review 4 EAC formulas + assumptions ETC and VAC formulas Both TCPI formulas TCPI vs CPI meaning Recompute EAC from CPI\n\nPMI Visual Wall · Poster 15 · EVM — Forecasting (EAC/ETC/VAC/TCPI) · original instructional design · A3 landscape",
  "title": "PMI VISUAL WALL · BATCH 4",
  "updatedAt": "2026-06-02T07:25:35.983Z"
}