Planed Value - PMP - PMBOK

Planned Value (PV)

As per the PMBOK Guide “Planned Value (PV) is the authorized budget assigned to work to be accomplished for an activity or WBS component.

Total planned value for the project is also known as Budget at Completion (BAC).

The Planned Value is the approved value of the work to be completed in a given time period; in other words, it is the money that you should have spent as per the schedule.

Planned Value is also referred to as the Budgeted Cost of Work Scheduled (BCWS).

Formula to calculate the Planned Value (PV)

Planned Value = (Planned % Complete) X (BAC)

A mathematical example of Planned Value (PV)

You have a project to be completed in 12 months and the total cost of the project is $100,000 USD. Six months have passed and the schedule says that 50% of the work should be completed.

What is the Planned Value (PV)?

Let us see what we have been given in this question.

Project duration: 12 months

Project Cost (BAC): $100,000 USD

Time elapsed: 6 months

Percent complete: 50% (as per the schedule)

The definition of Planned Value says that the Planned Value is the value of the work that should have been completed so far (as per the schedule).

Therefore, in this case we should have completed 50% of the total work.

Hence,

Planned Value = 50% of value of the total work
= 50% of BAC
= 50% of $100,000
= (50/100)X $100,000
= $50,000

Therefore, the Planned Value (PV) is $50,000 USD.

Application of Planned Value

Planned Value is used to calculate Schedule Variance (SV), and Schedule Performance Index (SPI).



COURTESY: http://pmstudycircle.com/2012/05/planned-value-pv-earned-value-ev-actual-cost-ac-analysis-in-project-cost-management-2/