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I wondered how MS Project calculates the quantities that are the basis of the EVM analysis, namely ACWP (AC), BCWS (PV) and BCWP (EV). In fact, starting with a simple plan with only ten tasks, I performed the calculations manually and compared the results with those obtained using MS Project. Before going into details, here are the definitions of these quantities that I used to do the calculations by hand.

As far as the Planned Value (PV) the definition is pretty simple. PV is the baseline time-phased budget, which is an immediate translation of the baseline schedule created from the project network. For simplicity, we will assume that all costs in this project are the costs associated with the hourly cost of various resources. In practice, we assume that there are no costs associated with the purchase of materials. Given the start and end dates for each task, PV is simply the cumulative increase in the overall estimated activity cost.

The Earned Value (EV) is the amount budgeted for performing the work that was accomplished at a given point in time, namely the Actual Time (AT). The calculation of EV is quite simple, in fact it is nothing more than the product of the Budget At Completion (BAC) and the Percentage of Completion (PC) of the project. Since the BAC is known (in fact, it corresponds to the PV value at the end of the project), it is only necessary to estimate the percentage of project progress.

The Actual Cost (AC) is the real cost incurred up to the AT point in time. AC is a measurement of the actual costs incurred for the work completed during the current review period and does not necessarily relate to the intended cost rise depicted in the PV curve.

Let us now consider the MS Planning in the picture below, and we look at the A task.

enter image description here

According to the above definition, PV corresponds to the cost calculated by multiplying the number of working hours, by the number of working days by the hourly rate (in our example 111.42 $/hour). Since task A lasts 5 days and we are at the end of the third day, PC = 2674.08 $. I would have expected to find a value of AC equal to PV. In fact, regardless of whether the resources worked effectively or not, I had to pay for these resources 2674.08 $, so I would have had to spend such a money. If I look at the result provided by MS Project AC is well below PV. Why?

Now consider a second case, similar to the previous one, where % Work completed increased from 20% to 69%. Theoretically, % Work Completed should only affect EV and not AC.The corresponding planning is shown in the picture below.

enter image description here

In this case, as if by a miracle, PV and AC coincide.

Consider yet a third case. The % Work completed has been increased to 90%. This case corresponds to the situation where I am ahead of the work I was scheduled to do. In fact, after only 3 days of work I was able to accomplish 90% of the planned work. The situation is depicted in the picture below.

enter image description here

In this case AC is equal to PV, but the value of AC is not correct. In fact, it has only been 3 days and therefore I cannot have spent an amount other than 2674.08 $, regardless of the fact that I worked with super performing resources.

The hand calculations look right to me, but I honestly don't understand what's happening. I made the following assumptions:

  • I forgot to turn on an option in MS Project that magically allows me to get the correct results. Not believing in magic, I doubt it

  • Changing the status date does not have the effect I expect on ACWP. Should that be the case, I do not understand why

If you have an explanation, I would really appreciate it.

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