Memory hook: Earned is completed value; actual is money spent.
Must remember
The critical path is the longest-duration dependency path controlling the earliest finish in the current model. Total float is allowable delay without delaying the relevant project finish; a critical activity normally has zero total float in a simple unconstrained network. Recalculate after changes. Crashing adds resources/cost to shorten feasible work; fast tracking overlaps work and increases coordination/rework risk.
For three-point estimates, triangular expected duration is (O + M + P) / 3; a commonly used PERT weighted estimate is (O + 4M + P) / 6. Estimates depend on assumptions and uncertainty. Story points express relative team estimates, not a universal conversion to hours or a fair comparison between teams.
Earned value uses PV (budgeted planned work), EV (budgeted completed work) and AC (actual cost). CV = EV - AC, SV = EV - PV, CPI = EV / AC, SPI = EV / PV. Negative variance or an index below one indicates unfavorable performance in that dimension. Example: EV 80, AC 100, PV 90 gives CPI 0.8 and SPI about 0.89.
EAC = BAC / CPI assumes current cost efficiency continues. EAC = AC + ETC uses a new estimate to complete; VAC = BAC - EAC. Select the formula whose assumptions match the scenario. Schedule variance expressed in money is not a direct count of days late, and SPI can lose usefulness near completion.
Contingency addresses identified uncertainty within the appropriate plan/baseline; management reserve addresses broader unplanned work under governance control. Track forecasts, cash flow and benefit value alongside spent cost. Report unfavorable trends honestly rather than changing baselines merely to hide variance.
Choose under exam pressure
| Requirement | Choice and reason |
|---|---|
| Need faster finish with extra feasible staffing | Evaluate crashing on critical work. |
| Current cost efficiency likely persists | BAC/CPI forecast. |
| Remaining work materially re-estimated | AC plus new ETC. |
Traps
- CPI is EV/AC, not AC/EV.
- A noncritical task shortened within its float may not shorten the project.
Active recall
1. EV 60 and AC 75: CPI?
0.8, meaning less budgeted value earned per unit of cost spent.
2. EV 60 and PV 50: SV?
+10 in budgeted-value units.
3. Why inspect the critical path?
It identifies dependencies controlling the modeled completion date.
4. Crashing versus fast tracking?
Adding resources/cost versus overlapping activities.
5. What does BAC/CPI assume?
That observed cost efficiency is representative of the remaining work.