Certified Supply Chain Professional (CSCP) Practice Exam

Which three inputs are crucial for EVM to generate measurements and ratios?

1. Planned value, earned value, actual cost

2. Forecasted value, labor costs, material costs

3. Budget estimates, contingency funds, profit margins

4. Cost baselines, risk assessments, quality metrics

The correct answer is: Planned value, earned value, actual cost

Earned Value Management (EVM) is a project management technique used to assess a project's performance by comparing the planned progress with the actual progress. To generate meaningful measurements and ratios, three key inputs are essential: planned value, earned value, and actual cost. Planned value represents the budgeted amount of work that is scheduled to be completed by a specific point in time. It serves as a benchmark against which actual performance can be measured. Earned value reflects the value of the work actually completed at a given point in time, allowing for an assessment of how much of the planned budget has been realized through completed work. Actual cost, on the other hand, is the total cost incurred for the work performed up to that point, providing insight into the financial resources consumed. Together, these three metrics enable project managers to calculate critical performance indices and ratios, such as the Cost Performance Index (CPI) and Schedule Performance Index (SPI), which inform decision-making and corrective actions to keep the project aligned with its objectives.