CDT505 Chap.10 Earned Value, Control and Closure
Earned Value, Control and Closure
Measure performance on a common basis
Earned value management compares planned value, earned value and actual cost at one status date. Schedule performance index divides earned value by planned value, while cost performance index divides earned value by actual cost. Ratios below one are unfavourable against the baseline, but diagnosis still requires work-package evidence.
Control turns variance into forecast and action. Closure then confirms acceptance, settles obligations, transfers ownership, releases resources and preserves learning.
Keep control and closure accountable
An index summarises baseline performance; it does not reveal the cause or guarantee the forecast.
Trace variance to packages, state the forecasting assumption and process any authorised change without rewriting history. At completion or termination, screen partial work, contracts, data, assets and residual actions. Transfer each obligation to a durable owner before releasing the temporary team.
Lessons should name the failed assumption, supporting evidence and changed practice, so future planning can use the closeout record rather than merely archive it.
What this chapter covers
- 01
The control cycle and baseline integrity
- 02
Planned value, earned value and actual cost
- 03
Schedule and cost variances
- 04
SPI and CPI interpretation
- 05
Forecast assumptions and authorised change
- 06
Termination, acceptance and formal closeout
Worked example · free
Interpret one earned value status point
- 3Compute SPI using EV and PV.
- 3Compute CPI using EV and AC.
- 2Interpret without overstating calendar delay or final outcome.
Key terms
- Planned Value
- The budgeted value of work scheduled for completion by the status date.
- Earned Value
- The budgeted value of work actually completed by the status date.
- Actual Cost
- The expenditure incurred for the work completed by the status date.
- Schedule Performance Index
- Earned value divided by planned value, used to compare completed and scheduled value.
- Cost Performance Index
- Earned value divided by actual cost, used to compare budgeted accomplishment with spending.
Earned Value, Control and Closure FAQ
How does the final status report support closure?
Reconcile the last planned value, earned value and actual cost figures to accepted scope, then explain remaining variance without rewriting the historical baseline. List every contract, claim, asset, data set and residual action that survives closure, assign each to an operational owner and preserve the acceptance or termination authority in the closeout evidence pack.
Can actual spending show how much work is complete?
No. Spending records cost, not accomplishment. Earned value applies the approved budget to completed work, allowing progress to be compared with planned value and cost efficiency to be compared with actual cost.
Does an SPI of 0.75 mean the project is twenty-five per cent late?
It means the project has earned seventy-five cents of budgeted work for each planned dollar at the status date. It is a value ratio, not a direct measure of calendar lateness. Network and milestone evidence are needed for time impact.
What must formal closure accomplish?
Closure confirms acceptance or an authorised termination state, settles contracts and accounts, transfers records and residual responsibilities, releases resources and preserves lessons. Cancellation does not remove existing obligations, so terminated projects still need controlled closeout.
Assessment move
Create a time-phased budget for a small project and choose a status date. For each work package, record the budgeted value scheduled, the budgeted value of completed work and the actual cost. Sum those values to PV, EV and AC only after confirming that scope and timing use the same baseline. Calculate schedule variance, cost variance, SPI and CPI.
Write the formulas from memory and circle the denominator so actual cost never enters SPI. Interpret ratios against one without translating SPI directly into calendar lateness. Trace the unfavourable dimension to individual packages and write a cause that could be investigated.
Add two completion forecasts using different assumptions about whether past cost efficiency continues, and explain why the assumption matters more than extra decimal places. Practise the control cycle by moving from status evidence to cause, forecast, corrective action and an authorised change request. Keep the original baseline unless governance approves changed scope or conditions; never use rebaselining to hide variance.
For closure, build separate checklists for normal completion and early termination. Both should address acceptance or termination authority, contracts and invoices, partial deliverables, records, operational ownership, unused resources and lessons. Take a cancelled project and name which obligations survive the decision to stop. Finish with an oral explanation of one EVM result and one closeout recommendation.
The answer should state the measure, its meaning, the evidence needed next and the management action. That sequence connects calculation to control and control to a responsible finish.
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