Question

Problem 3. The following project is at the end of its 6^th week. Find the cost and schedule variances. Also find the CPI and SPI. Then find the critical ratio of the project using earned value calculations. Finally, calculate the EAC for the project by at least two different methods.

Activity	Predecessor	Duration (wks)	Budget at Completion    ($)	Actual Cost ($)	% Complete
a	-	2	300	400	100
b	a	3	200	250	100
c	b	3	300	300	100
d	b	5	600	200	30
e	c,d	4	400	-	0

                                                                                       $1800              $ 1150

1. CV =
2. SV =
3. CPI =
4. SPI=
5. CR=

EAC=

Answer 1

Question – a:

Cost Variance = Earned Value – Actual Cost

Earned Value = 300*100% + 200*100% + 300*100% + 600*30% = 300 + 200 + 300 + 180 = 980

Actual Cost = 400 + 250 + 300 + 200 = 1150.

CV = 980 – 1150 = -170

Question – b:

Schedule Variance = Earned Value – Planned Value

To find the Planned value:

We are in the 6th week.

A should be done completely

B should be done completely.

C should have done for one week. 3 weeks cost is 300. So one week it is 100.

D should have done for one week. 5 weeks 600. So one week it is 120.

Planned Value = 300 + 200 + 100 + 120 = 720

Earned Value = 980 (from part a)

SV = 980 – 720 = 260

Question – c:

Cost Performance Index = EV/AC

EV = 980

AC = 1150

CPI = 980/1150 = 0.85

Question – d:

Schedule Performance Index = EV/PV

EV = 980

PV = 720

SPI = 980/720 = 1.36

Question – e:

Critical Ratio = Time remaining/remaining processing time = (14 – 6)/remaining processing time

Remaining processing time:

Total of activity e = 4 weeks

70% 0f d = 0.7*5 = 3.5 weeks

Total = 7.5 weeks

So CR = 8/7.5 = 1.07

Estimate at Completion = EAC = BAC/CPI

BAC = $1800

CPI = 0.85

EAC = 1800/0.85 = $2117.65

EAC = AC + (BAC – EV)

AC = 1150

BAC = 1800

EV = 980

EAC = 1150 + (1800 – 980) = 1150 + 820 = $1970

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