International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056 Volume: 02 Issue: 03 | June-2015 www.irjet.net p-ISSN: 2395-0072 © 2015, IRJET.NET-All Rights Reserved Page 317 EARNED VALUE ANALYSIS ON AN ONGOING RESIDENTIAL BUILDING PROJECT IN BANGALORE, INDIA Prof. B. Prakash Rao 1 ,Jacob Cherian 2 1 Associate Professor (Senior Scale), Department of Civil Engineering, MIT,Manipal University, Karnataka, India 2 M.Tech Research Scholar, Department of Civil Engineering, Manipal University, Karnataka, India ---------------------------------------------------------------------***--------------------------------------------------------------------- Abstract- Earned Value Management (EVM) is one of the best method to track the progress of a construction project. It takes into account both the time and the cost factors to evaluate its performance and forecast its completion time and cost. This paper discusses about how Earned Value Analysis (EMA) is introduced to a residential construction project. It calculates the performance in cost and schedule and pin points areas where improvements have to be made. It is predicted that if corrective actions are not made as per the current situation, the project will get delayed by 17 days and also that the contractor is estimated to make an additional profit of over six lakhs than what was originally planned. Key Words:Earned Value Management, Earned Value Analysis (EVA) 1. INTRODUCTION In developing countries like India, the construction industry faces a lot of project over runs due to the large amount of uncertainties. These project overruns are primarily attributed to time and cost overrun [1]. The conventional way of evaluating the budgeted cost is by analysing the difference between the planned and actual costs that arises in the project. Earned Value Management introduces a third variable called Earned Value which would give a clearer understanding of the budgeted cost and the schedule. It acts as an early warning to the project manager to spot and control potential problems that may arise so as to maximise profits and minimize delays [1] [2]. EVM is regarded as one of the best methods to track the project progress and its performance. It is said to have originated from the US Defence Agencies back in the ͳ96Ͳ’s. EVM is extensively used in the manufacturing industry and later found its way to the construction industry after it was standardized by the Project Management Institute. Using EVM the project manager can assess how ahead or behind the project and if the project is over budget or under budget [3]. By using three variables, the planned value, earned value and the actual cost other variables like schedule variance, cost variance, schedule performance index, cost performance index, budget at completion and so on can be computed. Using these computed variables the performance can be maintained or improved. It will even give a heads up concerning the required cash flow for the project, thereby giving ample time for the clients to raise the money [4]. 2. IMPORTANT EARNEDVALUE MANAGEMENT TERMS The basic terms associated with Earned Value Management [1] [2] Planned Value (PV): It is the amount of money budgeted to be spent at a particular point of time. Earned Value (EV): It is the amount of work in terms of cost that is actually accomplished at a particular point of time with respect to the planned value. Actual Cost (AC): It is the actual amount of money spent for the corresponding planned and earned value. Cost Variance (CV): It is the difference between Earned Value and Actual Cost. (EV-AC) Schedule Variance (SV): It is the difference between Earned Value and Planned Value. (EV-PV) Cost Performance Index (CPI): It is the ratio between Earned Value and Actual cost. If CPI greater than 1 then the project is under budget and CPI less than 1, then the project is under budget. Schedule Performance Index (SPI): It is the ratio between Earned Value and Planned Value. It indicated how much ahead or behind schedule the project is at a particular point of time. Critical Ratio (CR): It is the product of Cost Performance Index and Schedule Performance Index. It indicates the overall performance of the Project with respect to both cost and time. Estimate at Completion (EAC): It’s a prediction of the total project cost based upon the current trends in project performance. Variance at Completion (VAC): It is the difference between the planned budgets at the beginning of the project to the Estimate at Completion. This value denotes how much more profit or loss the contractor will make on that Project. Time Estimate at Completion (EACt): It predicts the completion time of a Project based on its current performance. EACt = (BAC / SPI) / (BAC / months)