PM592 Week 5 Assignment Problems

Problems 5-1 through 5-2 (Graded)

5-1 Earned Value Calculation You are 4 months into a 6 month project. The project is linear, which means that the progress and spending occurs at a constant rate. Our crack project team of highly skilled associates has worked diligently and put in extra hours to keep the project going. Our accounting department has provided the following data at the end of month 4: Actual cost to date = $88,800 Planned expenditures to date = $101,000 The CFO is excited and has sent you an email congratulating you for being 12.07% under budget. However, is it really time to hold a team celebration? That would be fun but your project manager mentality kicks in. Those numbers look good but how are we really doing? To understand the true project performance, we need to apply earned value techniques. The missing piece we need is Earned Value (i.e. what we have actually accomplished so far). You meet with your team and find that only 6 of the 7 tasks scheduled to be complete by the end of month 4 have actually been completed. Task 7 isnt even started! This information gives you the final data you need to apply Earned Value and develop an objective analysis. 1. What are the PV, EV, and AC for the project at the end of month 4? PV = $101,000 AC = $88,880 EV = (PV x % Completed) = 101,000 x 6/7 = $86,860 2. What are the SV, CV, SPI, and CPI for the project? SV = (EV-PV) = $86,860 - $88,880 = $-14,140 (Project is behind schedule) CV = (EV-AC) = $86,860 - $88,880 = $-2,020 (Project is over budget) SPI = (EV/PV) = .86 (If the number is below 1.0 which means the project is behind schedule) CPI = (EV/AC) = .97 (If the number is below 1.0, so the cost is greater than budget (over-budget) 3. Assess the project performance to date? Do you get to have the celebration?
No celebration. The project at the end of day 6 is over budget and behind schedule.

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PM592 Week 5 Assignment Problems

5-2 Earned Value Calculation

Project Schedule and Budget Data Provided: Task A B C D E F G Duration (days) 2 5 3 4 6 4 3 Predecessor(s) ----A B B C,D E Project Totals: Budget $1,600 $4,000 $14,050 $5,800 $12,000 $5,200 $3,900 $46,550

Status of the project at the end of day 6: Task A B C D E F G % Complete 100% 100% 90% 10% 0% 0% 0% Actual Cost of Work Performed $1,800 $4,500 $13,500 $500 $0 $0 $0

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PM592 Week 5 Assignment Problems

Project Network Diagram

Critical Path (CP) = B E G = 14 days

Tasks

Duration (Days)

10

11

12

13

14

15

16

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PM592 Week 5 Assignment Problems

1. Calculate the schedule variance for each task and the total project. Task A (1600 1600) = 0 Task B (4000 4000) = 0 Task C (12,645 14050) = -1405 Task D (580 1450) = -870 Task E (0 2000) = -2000 Task F- = 0 Task G = 0 Total SV = -4275

2. Calculate the cost variance for each task and the total project. Task A (1600 1800) = -200 Task B (4000 4500) = -500 Task C (12,645 13500) = -855 Task D (580 500) = 80 Task E (0 0) = 0 Task F- = 0 Task G = 0 Total C = -1475

3. What is your assessment of the project at this time? The project is behind schedule and over budget at the end of day 6. Therefore it is not likely that the project will be completed unless additional funding is approved and an assessment of resources (more or less) is needed to complete the project. There will be NO celebration for the project team!!!!

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