Question

Read through the Tree Trimming Project case. This case refers to the earned value (EV) of the owner, Will Fence’s Tree Trimming business. Will briefly describes his techniques for EV. Based on the description provided in the case, is Will using EV? Answer the corresponding question provided at the end of the case (300-500 words). Use references from the reading materials to support your response.

Case is below

Tree Trimming Project Wil Fence is a large timber and Christmas tree farmer who is attending a project management class in the fall, his off season. When the class topic came to earned value, he was perplexed. Isn’t he using EV? Each summer Wil hires crews to shear fields of Christmas trees for the coming Holiday season. Shearing entails having a worker use a large machete to shear the branches of the tree into a nice, cone shaped tree. Will describes his business as follows: A. I count the number of Douglas Fir Christmas trees in the field (24,000). B. Next, I agree on a contract lump sum for shearing with a crew boss for the whole field ($30,000). C. When partial payment for work completed arrives (5 days later), I count or estimate the actual number sheared (6,000 trees). I take the actual as a percent of the total to be sheared, multiply the percent complete by total contract amount for the partial payment [(6,000/$30,000 5 25%), (.25 3 $30,000 5 $7500)]. Answer the corresponding question provided below with (300-500 words) 1. Is Wil over, on, or below cost and schedule? Is Wil using earned value? 2. How can Wil set up a scheduling variance?

Answer 1

Solution-

Since project time is not agreed for the completion of the shearing of all the trees, it is not possible to calculate whether the work is ahead or behind of schedule. Also the actual cost incurred is also not given, we can't comment on cost schedule as well.

However the formula used by Wil to pay the contractors as given below-

[(Work completed / total work) * Budget at completion] is equal to Earned Value, we can say that Wil is using the concept of Earned Value.

Thus in order to setup a scheduling variance, Wil need to decide a timeline for project completion. Since Scheduling variance is given by -

Schedule Variance = Earned Value – Planned Value

and Planned value = (Planned % Complete) X (BAC)

We need to setup a plan or timeline for the project. Once a timeline is setup we can calculated the Planned value and with the value of Earned value as already calculated by Wil, he can calculate Scheduling variance.