Planned Value

Definition

Planned Value (PV) is a project management metric that represents the budgeted amount of work that was planned to be completed by a specific point in time. It serves as a baseline for measuring project performance, enabling project managers to assess whether the project is on track in terms of cost and schedule. PV is essential in performance reporting, providing a clear picture of expected progress against actual progress.

5 Must Know Facts For Your Next Test

1. Planned Value is calculated by multiplying the total project budget by the percentage of the project that was planned to be completed by a certain date.
2. It helps in setting performance baselines, making it easier to identify deviations from the planned schedule.
3. PV is crucial for understanding cost performance in conjunction with Earned Value and Actual Cost.
4. When evaluating project performance, Planned Value is often compared with Earned Value to determine schedule efficiency.
5. A consistent tracking of Planned Value throughout the project lifecycle aids in effective forecasting and decision-making.

Review Questions

• How does Planned Value contribute to assessing overall project performance?
  • Planned Value provides a baseline against which actual progress can be measured. By comparing Planned Value to Earned Value and Actual Cost, project managers can gain insights into whether the project is on track, behind schedule, or over budget. This comparison allows for early identification of issues, enabling corrective actions to be taken to keep the project aligned with its goals.
• In what ways can Planned Value assist in performance reporting throughout a project's duration?
  • Planned Value plays a critical role in performance reporting as it serves as a benchmark for assessing the project's progress. By regularly measuring the actual work completed against Planned Value, stakeholders can identify trends, variances, and potential risks. This transparency allows for informed discussions about project status and necessary adjustments to resources or timelines.
• Evaluate how an understanding of Planned Value can enhance decision-making during a project's execution.
  • Understanding Planned Value empowers project managers to make informed decisions by providing a clear framework for measuring progress and performance. By analyzing deviations from Planned Value, managers can quickly pinpoint issues such as resource allocation inefficiencies or delays in task completion. This analytical approach allows them to implement timely corrective actions, optimize resource utilization, and adjust forecasts, ultimately leading to better project outcomes and stakeholder satisfaction.

Related terms

Earned Value: Earned Value (EV) measures the value of work actually performed up to a specific date, allowing for comparison against Planned Value and Actual Cost.

Actual Cost: Actual Cost (AC) refers to the total costs incurred for the work completed by a specific point in time, used to assess project financial performance.

Schedule Variance:

Schedule Variance (SV) indicates the difference between Earned Value and Planned Value, helping to determine whether the project is ahead or behind schedule.