Planned Value (PV) is a project management term used to describe the budgeted cost of work scheduled for a specific period of time. It is also known as Budgeted Cost of Work Scheduled (BCWS). PV is an important tool for measuring and controlling project performance, as it allows project managers to compare the planned costs with actual costs.
The PV is calculated by multiplying the total number of hours or days allocated to a task by the rate per hour or day. This figure can then be compared with the actual cost incurred in completing the task, which is known as Actual Cost of Work Performed (ACWP). The difference between these two figures gives an indication of how well the project is progressing.
The calculation of PV involves multiplying the total number of hours or days allocated to a task by the rate per hour or day. For example, if a task requires 10 hours at a rate of $20 per hour, then the PV would be $200. This figure can then be compared with the actual cost incurred in completing the task, which is known as Actual Cost of Work Performed (ACWP).
The calculation of PV can also be done using software such as Microsoft Project. This software allows users to enter information about tasks and resources, and then calculates the PV automatically. This makes it easier for project managers to track progress and ensure that projects are completed on time and within budget.
Using Planned Value (PV) provides several benefits for project managers. Firstly, it helps them to accurately estimate costs and plan budgets accordingly. Secondly, it enables them to monitor progress against planned costs and take corrective action if necessary. Finally, it allows them to identify areas where costs are exceeding expectations and take steps to reduce them.
Overall, using PV helps project managers to better manage their projects and ensure that they are completed on time and within budget. It also helps them to identify potential problems before they become too costly or difficult to resolve.