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Earned Value Management (EVM) is a project management technique for measuring project performance (schedule, cost mainly)...

Earned Value Management (EVM) is a project management technique for measuring project performance (schedule, cost mainly) and progress in an objective manner in terms of work achieved (Value):

The data identified below was listed in a project’s status report.

At time of status report:

Planned Value of work (PV) = $70,000

Earned Value of work performed (EV) = $50,000

Actual Cost of work performed (AC) = $75,000

Original Planning:

Budgeted cost At Completion (BAC) = $110,000

Original length of the project is 15 months

Using the data, calculate the following:

a) Cost Performance Index (CPI). (1 mark)

b) Schedule Performance Index (SPI). (1 mark)

c) Expected cost At Completion (EAC). (1 mark)

d) Estimate To Complete (ETC).

e) The Schedule Variance (SV).

f) Discuss how the project is tracking (e.g. ahead or behind schedule, under or over budget)?

Solutions

Expert Solution

a) Cost Performance Index (CPI)=Earned value of work performed (EV) / Actual Cost of work performed (CV)

Earned value of work performed (EV) = $50,000

Actual Cost of work performed (CV)=$75,000

Cost Performance Index (CPI)=50000/75000

=0.66 (over budget)

b) Schedule Performance Index (SPI)=Earned Value of work performed (EV) / Planned Value of work (PV)

Earned Value of work performed (EV)=$50,000

   Planned Value of work (PV)=$70,000

  Schedule Performance Index (SPI)=50000/70000

=0.71 (behind schedule)

c) Expected cost At Completion (EAC)=Budgeted cost At Completion (BAC) / Cost Performance Index (CPI)

Budgeted cost At Completion (BAC)=$110,000

  Cost Performance Index (CPI)=0.66

Expected cost At Completion (EAC)=110000/0.66

=$166,666.66

d) Estimate To Complete (ETC)=Expected cost At Completion (EAC) - Actual Cost of work performed (AC)

Expected cost At Completion (EAC)=$166,666.66

Actual Cost of work performed (AC) = $75,000

  Estimate To Complete (ETC)=$166,666.66 - $75,000

= $91666.66

e) The Schedule Variance (SV)=Earned Value of work performed (EV) - Planned Value of work (PV)

Earned value of work performed (EV) = $50,000

Planned Value of work (PV) = $70,000

The Schedule Variance (SV)=50000 - 70000

= -20,000 (behind schedule)

f) The project is over budget since Cost performance Index (CPI) is 0.66 which is less than 1 and the project is behind schedule since The Schedule Variance (SV) and Schedule Performance Index (SPI) are both less than 1

venereology answered 8 months ago
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