Planned Value (PV)
Planned Value is the approved value of the work to be completed in a given time. It is the value that should have been earned as per the schedule. As per the PMBOK Guide, “Planned Value (PV) is the authorized budget assigned to work to be accomplished for an activity or WBS component.”
Planned Value (PV) is the first element of earned value management. Planned Value is the approved value of the work to be completed in a given time. It is the value that you should have been earned as per the schedule.
You calculate Planned Value before actually doing the work, which also serves as a baseline. Total Planned Value for the project is known as Budget at Completion (BAC).
Planned Value is also referred to as Budgeted Cost of Work Scheduled (BCWS).
The Formula for Planned Value (PV)
The formula to calculate Planned Value is simple. Take the planned percentage of the completed work and multiply it by the project budget and you will get Planned Value.
Planned Value = (Planned % Complete) X (BAC)
Example of Planned Value (PV)
You have a project to be completed in 12 months. The budget of the project is 100,000 USD. Six months have passed and the schedule says that 50% of the work should be completed. What is the project’s Planned Value (PV)?
Given in this question.
Project duration: 12 months
Project cost (BAC): 100,000 USD
Time elapsed: 6 months
Percent complete: 50% (as per the schedule)
Planned Value is the value of the work that should have been completed so far (as per the schedule).
In this case, we should have completed 50% of the total work.
Planned Value = 50% of the value of the total work
= 50% of BAC
= 50% of 100,000
= (50/100) X 100,000
= 50,000 USD
Therefore, the project’s Planned Value (PV) is 50,000 USD.
Application of Planned Value (PV)
Planned Value is used to calculate Schedule Variance and Schedule Performance Index.
- Definition - What Does Planned Value (PV) Mean? PM Study Circle