In: Operations Management
Answer the following questions. Show your calculations used to get the answer. If calculations are not provided, then you will not receive full credit for your answer.
Scenario 1: You have a project that is scheduled to be completed in 8 days at a budgeted cost of $200,000. At the end of day 5 you do an analysis and you determine the job is 70% complete and you have spent $130,000. At the end of day 5:
Scenario 2: You are the project manager of a project to install stone fireplaces at an new condo development. A total of 24 fireplaces are planned to be installed over a 4-month period. The total budget for the project is $144,000. The project is at the end of the 1st month and 5 fireplaces have been installed and $28,000 has been spent.
Scenario 3: A project has a PV of $65,000, an EV of $75,000 and an AC of $82,000.
Scenario 4: A project has a PV of $10,000, a SPI of 0.92 and a CPI of 0.90.
Scenario 1
Planned completion = 5/8 = 62.5 %
1.
Planned Value, PV = Budgeted cost * Planned completion
= 200000*62.5%
= $ 125,000
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2.
Expected Value, EV = 200000*70%
= $ 140,000
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3.
Actual Cost, AC = $130,000
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4.
Cost Variance = EV - AC
= 140000 - 130000
= $ 10,000
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5.
Schedule Variance = EV - PV
= 140000 - 125000
= $ 15,000
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6.
CPI = EV / AC
= 140000 / 130000
= 1.077
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7.
SPI = EV / PV
= 140000 / 125000
= 1.12
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8.
Based on the answers to above questions, the project is under budget
because Cost Variance is positive and CPI is greater than 1
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9.
Based on the answers to above questions, the project is ahead of schedule
because Schedule Variance is positive and SPI is greater than 1