In case in mr project I have a cost planned at a certain time, which constitutes a large part of the total project budget, and I want to calculate my schedule performance index or variance, this large cost will dominate the cost of total planned work so far used in the formula Schedule performance index as I will be using Earned Value = Percent complete (actual) x Task Budget , but here the task budget might be very dominated by purchasing a/or several expensive purchase, this dominance will skew the value of my earned value. There might be still a lot work left to be done, but it has a lower cost. How would you, or PMI, suggest to handle this? Saving Changes...
This is a common situation where a project has large upfront capital costs which are much greater than other (e.g. labor costs). In such cases, I'd suggest calculating your EVM metrics without the inclusion of those large one time costs assuming those were in line with your budget.
This approach of using EVM for a subset of the overall project can also be used when you have different contractors working on different workstreams within the project and you want to calculate variances for each individually.
I agree with Kiron. The purpose of EVM is to manage what you can control. Focus on that and not some large capital cost for example that blurs the information you are trying to use.
As good PMs we need to be able to explain what the data means, not just present the numbers. What I do in this case is create the chart so you have a line with and without the one time charge. That usually makes it very obvious that this has nothing to do with our plan execution. Saving Changes...
