In: Finance
Information provided:
No. of credits planned per quarter (A) = 15
No. of quarters to finish the course (B) = 6
Total No. of credits to finish the course (A*B) = 90
Cost estimated per quarter (C) = $2,500
Cost estimated per credit (CR = C/A) = $167
Total cost estimate to finish the course (B * C) = $15,000
Solution:
Planned Value (PV) = Cost per credit * Credits per quarter * No. of quarters = $167 * 15 * 2 = $5000
Earned Value (EV) = Cost per credit * Credits earned = $167 * 45 = $ 7500
Actual Cost (AC) = Cost per quarter * No of quarters = $3000 * 2 = $6000
SV = EV – PV = $2500
CV = EV – AC = $1500
SPI = EV/PV = 1.50
CPI = EV/AC = 1.25
So, as seen above, the progress is better than the plan with minimized cost
Planned Value (PV) = Cost per credit * Credits per quarter * No. of quarters = $167 * 15 * 2 = $5000
Earned Value (EV) = Cost per credit * Credits earned = $167 * 30 = $5000
Actual Cost (AC) = Cost per quarter * No of quarters = $3000 * 2 = $6000
SV = EV – PV = 0
CV = EV – AC = -$1000
SPI = EV/PV = 1
CPI = EV/AC = 0.83
So, as seen above, the progress is on par with the plan with cost overruns.