Question

In: Operations Management

At week 24 of a project to shoot a television commercial what should the expenditures be?...

At week 24 of a project to shoot a television commercial what should the expenditures be? If the earned value is right on schedule but the actual expenses are $9,000, what are the cost and schedule variances? What are the three indexes, The ETC (funds needed to complete the project), and Expected project cost at completion?

Activity

Predecessor

Duration

(weeks)

Budget

$

A

-

6

900

B

-

6

1200

C

A

6

1200

D

A

12

1800

E

B, C

14

1400

F

B, C, D

10

1500

G

D, E

16

800

Solutions

Expert Solution

Calculate the Early start and early finish times as shown below :-

Early start time Is the earliest time an activity can start. For an activity, the early start time Is the sum of early start time and the duration of the predecessor activity.

Early finish time of each activity as the early finish time of precedesser activity.Expenditure at the and of week 24 = 900+1200+1,200+1,800+1200 = $ 6,300

Hence, the expenditure at the end of weak 24 will be
6,301$.

Detemnine the cost and schedule variances as shown below Cost variance = earned value — actual cost =

6,300 —9,000 = -2,700

Schedule vanance = earned value — planned value =

6,300 — 6,300 = 0

Determine the dace indexes, the ETC, and the EAC as shown below:

CPI = earned value / actual cost = 6,300/9,000 = 0.7

SPI = Famed value / planned value = 6,300 / 6,300 = 1

BAC = 900+1200+1200+1,800+1,400+1,500+800 = 8,800

EAC = actual cost + [(BAC-EV)/(CPIxSPB) = 9,000 + [(8,800-6,300) /(0.7x1)] = 12,571.428

ETC = EAC — AC = 12,571.428 — 9,000 = 3,571.428.


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