PMGT501; WBS 6.

4 Project Control David Bolton

WBS 6.4.1: Solve Problem #3 found on page 467 of the Meredith and Mantel text. A software development project at day 70 exhibits an actual cost of $78,000 and a scheduled cost of $84,000. The software manager estimates a value completed of $81,000. What are the cost and schedule variances and CSI? Estimate the time variance.

AC = $78,000 PV = $84,000 EV = $81,000 AT = 70 days Cost Variance = EV AC = $81000 - $78000 Cost Variance = $3,000 Schedule Variance = EV PV = $81,000 - $84,000 Schedule Variance = -$3000 CPI = EV/AC = 1.03 SPI = EV/PV = 0.96 Cost Schedule Index = EV2/(AC)(PV) = ($81,000)2/($78,000)($84,000) Cost Schedule Index = 6,561,000,000 / 6,552,000,000 Cost Schedule Index = 1.001 Time Variance = ST AT = (AT)(CSI) AT = (70)(1.001) 70 Time Variance = 0.07 days This is good. The project is a little under budget (CPI = 1.03) and a little behind schedule (SPI = 0.96). In theory, the PM could spend a little extra and make up that minor schedule variance. In our PM shop, CPI and SPI between 0.95 and 1.05 is green so theres no problem here.

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PMGT501; WBS 6.4 Project Control David Bolton

WBS 6.4.2: Solve problem #4 found on page 467 of the Meredith and Mantel text. A project to develop a county park has an actual cost in month 17 of $350,000, a planned cost of $475,000 and a value completed of $300,000. Find the cost and schedule variances and the three indices. AC = $350,000 PV = $475,000 EV = $300,000 AT = 17 months Cost Variance = EV AC = $300,000 - $350,000 Cost Variance = -$50,000 Schedule Variance = EV PV = $300,000 - $475,000 Schedule Variance = -$175,000 Cost Performance Index = EV/AC = $300,000/$350,000 = 0.857 Schedule Performance Index = EV/PV = $300,000/$475,000 = 0.632 Cost Schedule Index = (CPI)(SPI) = 0.857 * 0.632 Cost Schedule Index = 0.542 This is bad. The project has spent more than scheduled and is still far behind where it should be. CPI is yellow and SPI is red. Expect to be on the Directors radar with performance like this.

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PMGT501; WBS 6.4 Project Control David Bolton

WBS 6.4.3: Solve problem #5 found on page 467 of the Meredith and Mantel text. A consulting project has an actual cost in month 10 of $23,000, a scheduled cost of $17,000 and a value completed of $20,000. Find schedule and cost variances and the three indices.

AC = $23,000 PV = $17,000 EV = $20,000 AT = 10 months Cost Variance = EV AC = $20,000 - $23,000 Cost Variance = -$3,000 Schedule Variance = EV PV = $20,000 - $17,000 Schedule Variance = $3,000 Cost Performance Index = EV/AC = $20,000/$23,000 = 0.87 Schedule Performance Index = EV/PV = $20,000/$17,000 = 1.18 Cost Schedule Index = (CPI)(SPI) = 0.87 * 1.18 Cost Schedule Index = 1.027 This one is a mixed bag. The PM has overspent (CPI=.87) and is over his earned value projection but is way ahead of schedule (SPI =1.18).

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PMGT501; WBS 6.4 Project Control David Bolton

WBS 6.4.4: Solve problem #13 found on page 468 of the text. The following project is at the end of its sixth week. Find cost and schedule variances and the CPI, SPI, ETC and EAC. First, the activity chart:

Activity Predecessor Duration a b c d e a a b, c 2 3 2 5 4

Budget ($) 300 200 250 600 400

Actual Cost ($) 400 180 300 400 200

% Complete 100.00% 100.00% 100.00% 20.00% 20.00% BAC : 1750

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PMGT501; WBS 6.4 Project Control David Bolton

Then the Plan Chart showing 50/50 EV reporting for the tasks.
Plan! Activity a b c d e Week: 1 150 100

2 150 0

100 125 300 200 125

PV Cum PV EV Cum EV Actual Cost Cum A/C

250 250 250 250 0 0

150 400 150 400 400 400

525 925 286 686 180 580

125 1050 125 811 300 880

200 1250 40 851 0 880

0 1250 0 851 600 1480

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PMGT501; WBS 6.4 Project Control David Bolton

Finally, the analysis:

Plan! Activity CV SV CPI SPI ETC EAC Week: 1 250 0 1 1.000 1750 1750

2 0 0 1.000 1.000 1350 950

3 106 -239 1.183 0.742 899.59184 319.59184

4 -69 -239 0.922 0.772 1018.890259 138.8902589

5 -29 -399 0.967 0.681

6 -629 -399 0.575 0.681

929.6357227 1563.478 49.63572268 83.47826

The project appears to be going OK during the first two weeks. Problems surface in the third week when task D reports 50% of the planned $600 task value but only completes 20% of the work. The problem worsens in week 5 when task E starts and also reports 50% of task value but only completes 20% of the work.

I think the critical input method of EV reporting might give a more accurate picture of the project status but it is still going to show the obvious: The project is slipping schedule (decreasing SPI) and overrunning budget (decreasing CPI, increasing ETC). Notice EAC in week 6 is $83 and there are still two weeks to go in the program. Not good.

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