PMAN 650

Session 5 Individual Assignment

Earned Value
Introduction
All of you have had at least an introduction to earned value management in the
project management fundamentals course. Many of you may have had the
opportunity to use earned value management in your professional careers. In
practice, most EVM analysis results are generated by scheduling software or other
applications. As a project manager, you must have a good handle on the concepts
and be able to verify the accuracy of EVM analysis results.
In this assignment, you will have an opportunity to brush up and expand upon your
EVM knowledge and skills by applying EVM concepts to a practical problem. THIS
ASSIGNMENT REQUIRES A MANUAL ANALYSIS - DO NOT USE MICROSOFT
PROJECT.
Problem Background
Your project consists of six activities shown in the table below, along with: (1)
planned start and finish dates; (2) activity budgets; and (3) earned value (EV)
accrual rules from you project cost management plan.
Activity

Planned
Start
Mon 10/13/14

Planned
Finish
Fri - 10/31/14

10,000

Fri -11/28/14

30,000

Activity Three

Mon 10/20/14
Mon -11/3/14

Fri -11/14/14

7,000

Activity Four

Mon -10/13/14

Fri -11/14/14

20,000

Activity Five

Mon 11/17/14

Fri - 12/5/14

10,000

Activity Six

Mon -12/8/14

Fri -12/19/14

7,000

Activity One

Activity Two

Budget

EV Accrual
Rule
Percent
Complete with
Gates
Fixed Formula
-50/50
Fixed Formula
-20/80
Weighted
Milestones
Fixed Formula
0/100
Fixed Formula
0/100

Activity Two has a start-to-start relationship (one week lag time) with Activity One.
Activity Three has a finish-to-start relationship with Activity One. Activity Five has
finish-to-start relationships with activities Three and Four. Activity Six has finish-tostart relationships with activities Two and Five.
Assumptions
1. Assume a five-day work week.
2. For all activities (except Activity Four), assume the expenditure rate is
constant over the duration of the activity, i.e.:

PMAN 650
Session 5 Individual Assignment
Earned Value

For Activity Four, assume the expenditure profile shown below:

The project sponsor wants you (the PM) to present a project cost and schedule
performance assessment using data through Friday, Nov 7, 2014. You have collected
the following information:

Activity
Activity One
Activity Two

Actual Start
Mon 10/13/14
Mon -

Actual Finish
Fri - 11/3/14

Actual Cost
12,000
12,000

PMAN 650
Session 5 Individual Assignment
Earned Value
Activity
Activity
Activity
Activity

10/20/14
Mon -11/4/14
Mon -10/13/14

Three
Four
Five
Six

4,000
20,000
0
0

For Activity One, three equally-valued gates have been established and all gates are
complete as of 11/7/14.
For Activity Four, four milestones have been established with the following values:
(1) milestone 1 30%; milestone 2- 30%; milestone 3 10%; milestone 4 -30%.
Three of the milestones are complete as of 11/7/14.

Show all work. Round dollar values to the nearest dollar.

Calculate all other variables to three decimal places.
1. Earned Value Measures
a. Calculate earned value measures for each activity and for the
cumulative project as of 11/7/14; fill in the table below:
Activity

Planned Value
(PV)

Earned Value
(EV)

Activity One
Activity Two
Activity Three
Activity Four
Activity Five
Activity Six
Entire Project

Actual Cost
(AC)
12,000
12,000
4,000
20,000
0
0

2. Earned Value Performance Measures

a. Calculate earned value performance parameters for each activity and
for the cumulative project as of 11/7/14; fill in the table below:
Activity

Activity
Activity
Activity
Activity

One
Two
Three
Four

Schedule
Variance
(SV)

Schedule
Performanc
e Index
(SPI)

Cost
Variance
(CV)

Cost
Performa
nce Index
(CPI)

PMAN 650
Session 5 Individual Assignment
Earned Value
Activity Five
Activity Six
Entire Project
b. Is the project ahead of schedule, on schedule, or behind schedule?
What information are you using to make this assessment and why?
c. Is the project over budget, under budget, or on budget? What
information are you using to make this assessment and why?
3. Earned Value Forecasts
a. Calculate the range (low/most-likely/high) of possible Estimates-atCompletion (EAC).
b. Using the low EAC, what is the Estimate-to-Complete (ETC)?
c. Using the high EAC, how much more or less money (other than the
current budgeted amount) will you need to finish the project?
d. How much would the Cost Performance Index (CPI) have to change in
order to complete the project within the original budget?