What Is Planned Value? EDGEBIC Definition and Formula

Planned value is the amount of work, measured in hours, that a job's schedule said should have been finished by a given cut-off date. It is the plan's own answer to "where should we be by now?", and it is the yardstick every schedule performance measurement is taken against. In EDGEBIC by User Solutions it is computed by clipping each scheduled operation's planned window at the report's To date and summing the hours that survive the clip, so an operation straddling the cut-off contributes only its earlier portion.

This entry is part of the EDGEBIC glossary series on the platform overview; for the wider vocabulary of planning terms, see the manufacturing glossary. Planned value is one of three figures that make Earned Value Management work, alongside earned value and the frozen budget at completion.

How Planned Value Works

Think of a training plan for a long race. The full plan is the budget: every session, all the way to race day. Planned value is the mile marker the plan says you should have passed by this morning. It says nothing about how far you have actually run, and nothing about how tired you are. It only states the intention, dated.

That distinction is the whole reason the number exists. Comparing what a job has finished against what it should have finished by now separates two different failures that look identical on a status call. A job can be burning hours faster than budgeted while still being ahead of the calendar, and a job can be beautifully efficient while quietly slipping. You cannot tell them apart from a single completion percentage. You can tell them apart the moment you have a dated expectation to measure against, and that dated expectation is planned value.

The clipping rule is what makes it dated. EDGEBIC does not ask which operations are marked complete, and it does not look at actuals at all. It walks the job's scheduled operations, each of which has a planned start and a planned end, and asks how much of each window sits before the report's cut-off:

• An operation whose planned end is before the cut-off contributes all of its planned hours.
• An operation that straddles the cut-off contributes the hours before it.
• An operation whose planned start is after the cut-off contributes nothing.

Because the calculation reads the plan and only the plan, planned value is stable in a useful way. Logging actuals does not change it. Re-running the report with the same To date gives the same number. What changes it is a reschedule that moves the operations themselves, which is correct: a new plan carries a new expectation.

A Concrete Example

Take job J-100 for product Widget A, with five routing steps.

Budget at completion is 8 + 12 + 24 + 4 + 2 = 50 hours.

Now run the report with a cut-off that lands halfway through step S4. Steps S1, S2 and S3 are entirely in the past, so they contribute their full 8, 12 and 24 hours. S4 is half past the cut-off, so it contributes 2 of its 4 hours. S5 has not started in the plan, so it contributes nothing.

Planned value = 8 + 12 + 24 + 2 = 46 hours.

Against that, 55 hours have actually been logged on the job, which caps percent complete at 100 and puts earned value at the full 50 hours. Schedule performance index is therefore 50 divided by 46, or 1.09: the job is ahead of where the plan expected it to be. Cost performance index is 50 divided by 55, or 0.91: it is buying that lead with more hours than budgeted. Two honest facts, and neither is visible without planned value in the denominator.

How EDGEBIC Uses Planned Value

Planned value appears as the PV h column on the Earned Value report, sitting between the frozen BAC and the actual hours, and it feeds two of the report's own columns rather than standing alone:

• Schedule performance index is earned value divided by planned value. The report sorts ascending by this index, so the jobs furthest behind their dated expectation rise to the top of the grid.
• When planned value is zero, because nothing on the job was scheduled to finish before the cut-off, the index is returned as 1.0 rather than failing on a division by zero. That guard value is a placeholder, not a compliment.

The cut-off is the report's To date, so planned value is only as meaningful as the range you ask for. Running the report to a date in the far future pushes planned value up to the full budget and makes every job look behind. Running it to today, which is the usual intent, gives the comparison a planner actually wants. The walkthrough in how to run the Earned Value report shows where the columns sit and which date inputs drive them.

One last consequence worth holding onto: because planned value is built from scheduled windows rather than from logged completions, it is only as truthful as the schedule. A routing whose hours per unit were never corrected produces a confident, precise, wrong expectation. If a job's indices look strange before you have investigated the floor, look at the plan first.