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Assignment 3 - EVM

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36 views5 pages

Assignment 3 - EVM

Uploaded by

ajay.daroch10
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ASSIGNMENT 3-EVM

PROJECT MANAGEMENT ESSENTIAL


BUSN-3600-004
17TH NOV 2023

AJAY KUMAR
300357443
ASSIGNMENT 3-EMV

Given the following data for a one-year project, answer the following:
Assume you have actual and earned value data at the end of the second month.
Given: Planned Value (PV) = $23,000
Earned Value (EV) = $20,000
Actual Cost (AC) = $25,000
Budget at Completion (BAC) = $120,000
A. What is the cost variance, schedule variance, cost performance index (CPI), and schedule
performance index (SPI) for the project?
B. How is the project progressing? Is it ahead of schedule or behind schedule? Is it under budget or
over budget?
C. Use the CPI to calculate the estimate at completion (EAC) for this project.
D. Use the SPI to estimate how much longer it will take to finish this project. This does not include
the time already taken.
SOLUTION: -
(A). The cost variance, schedule variance, cost performance index (CPI), and schedule performance
index (SPI) for the project are calculated as follows:

 Cost Variance (CV) = Earned Value (EV) - Actual Cost (AC)

= $20,000 - $25,000

CV = -$5,000

 Schedule Variance (SV) = Earned Value (EV) - Planned Value (PV)

= $20,000 - $23,000

SV = -$3,000

 Cost Performance Index (CPI) = Earned Value (EV) / Actual Cost (AC)

= $20,000 / $25,000

CPI = 0.8

 Schedule Performance Index (SPI) = Earned Value (EV) / Planned Value (PV)

= $20,000 / $23,000

SPI = 0.87
ASSIGNMENT 3-EMV

(B). The project is progressing behind schedule and over budget. This can be inferred from the
negative values of CV and SV, and the values of CPI and SPI that are less than 1.

(C). The estimate at completion (EAC) for this project can be calculated using the CPI as follows:

 EAC = Budget at Completion (BAC) / Cost Performance Index (CPI)

= $120,000 / 0.8

EAC = $150,000

This means that the project is expected to cost $150,000 at completion, which is $30,000 more than
the original budget.

(D). The estimate to complete (ETC) for this project can be calculated using the SPI as follows:

 Estimate time to complete the project (ETC) = Time to complete the project/ SPI

= 12 months/0.87

ETC = 13.8 months

This means that the total time to complete the project will take about 13.8 months.

So, now it will take 11.8 months to complete the project if we do not include the time already taken.
ASSIGNMENT 3-EMV
ASSIGNMENT 3-EMV

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