In earned value management, what does Planned Value (PV) represent?

In earned value management, what does Planned Value (PV) represent?

• A. Actual cost incurred
• B. Value of completed work for which payment has been received
• C. Authorized budget for the scheduled work
• D. Budget at completion

Answer: (C)

Planned Value is the authorized budget for the work that is scheduled to be performed by a given date. It represents the value, in currency, of the plan—what the project baseline says should have been completed by that point (often called the Budgeted Cost of Work Scheduled). It is not the actual money spent (that’s the actual cost incurred) and it’s not the value of work actually completed (that’s earned value). It’s also not the total project budget (that’s the Budget at Completion). For example, if the baseline plan calls for $200,000 of work to be completed by the end of the month, the Planned Value at that date is $200,000. If only $150,000 of work is actually completed by then, earned value would be $150,000, and you’d have a Schedule Variance of EV minus PV, which in this case would be -$50,000, indicating you're behind in value terms.

Planned Value is the authorized budget for the work that is scheduled to be performed by a given date. It represents the value, in currency, of the plan—what the project baseline says should have been completed by that point (often called the Budgeted Cost of Work Scheduled). It is not the actual money spent (that’s the actual cost incurred) and it’s not the value of work actually completed (that’s earned value). It’s also not the total project budget (that’s the Budget at Completion).

For example, if the baseline plan calls for $200,000 of work to be completed by the end of the month, the Planned Value at that date is $200,000. If only $150,000 of work is actually completed by then, earned value would be $150,000, and you’d have a Schedule Variance of EV minus PV, which in this case would be -$50,000, indicating you're behind in value terms.