PMBOK Guide 7th Edition: Planned Value (PV)
1. Importance: Understanding Planned Value (PV) is vital as it is an essential aspect of project cost management. PV indicates how much of the project's budget should have been spent according to the schedule. It aids in measuring the project's progress from a cost perspective so that managers can make informed decisions.
2. Definition: Planned Value (PV), often referred to as Budgeted Cost of Work Scheduled (BCWS), is the authorized budget assigned to scheduled work to be accomplished for an activity or Work Breakdown Structure (WBS) component.
3. Working: To calculate PV, multiply the planned percentage of completed work by the total project budget. PV works as an indicator to show the value of the work that was supposed to be accomplished according to the project's schedule.
4. Answering exam questions: For the exam, remember the formula PV = (Planned % Complete) x (Total Budget). Questions might present you with the planned percentage of completed work and the total budget and ask you to calculate the PV.
5. Exam Tips:
- Always remember the formula and the meaning of each term.
- Practice questions on PV to get the concept clear.
- Remember the difference between PV, Earned Value (EV), and Actual Cost (AC).
- In case of a question presenting a scenario, break it down to compute the PV.
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Planned Value practice test
Planned Value (PV), also known as Budgeted Cost of Work Scheduled (BCWS), represents the estimated value of the scheduled work at any given point in time during the project. It is used as a performance baseline for determining how well a project is progressing in terms of cost, time, and scope. Comparing PV with the actual cost and earned value indicates if the project is on schedule and within the planned budget. PV plays a vital role in EVM, helping project managers track the financial performance and making informed decisions.
Time: 5 minutes Questions: 5
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Project Management Professional Preparation Package (2024)
- Earn 35 PDUs needed for your PMP certification
- 8199 Superior-grade Project Management Professional practice questions.
- Accelerated Mastery: Deep dive into critical topics to fast-track your mastery.
- Unlock Effortless PMP preparation: 5 full exams.
- 100% Satisfaction Guaranteed: Full refund with no questions if unsatisfied.
- bonus: If you upgrade now you get upgraded access to all courses