In: Operations Management
As the first days of work on the Dune Buggy progress, you are concerned that information provided to you from your seconded supervisors, in terms of work completed, may not be accurate. As a result you may be experiencing problems which will only surface much later, when it will be to late for corrective action.
To remedy the problem, you decide to implement the same system of rigid controls that A-1 is being forced to apply on its military contracts, ie. Earned Value.
As a first step, using the following pricing data developed for the Cement Dune Buggy Project augmented with overhead costs, determine a cost/schedule baseline, by calculating the Planned Value (PV) for each of days 10, 25 and 40 .
Assume that all activity costs are distributed evenly on a daily basis.
What is the Budget at Completion (BAC)?
Description Durn Start Finish Cost
A Design Dune Buggy 10 01 10 3915
B Order, Receive Materials 12 11 22 540
C Test, Prepare Engine 11 23 33 4061
D Add Suspension 06 25 30 2063
E Add Drive Train 03 34 36 1248
F Add W/A/S to Frame 04 31 34 1269
G Test Fit Body Shell 01 43 43 227
H Cast Body Shell 05 35 39 2457
I Sand & Prime Shell 03 40 42 725
J Paint Body Shell 03 44 46 1359
K Install Engine 05 44 48 1673
L Attach Body 01 49 49 369
M Install Accessories 03 50 52 964
N Road Test 02 53 54 608
21,478
Status Report: Ending Day 10 (Note: We ignore all other activities that start on or after day 10).
Activity |
Planned % completion |
Cost |
Planned Value (PV) |
A |
100 % |
3,915 |
1 x 3,915 = 3,915 |
Cumulative Total |
3,915 |
Status Report: Ending Day 25 (Note: We ignore all other activities that start on or after day 25).
Activity |
Planned % completion |
Cost |
Planned Value (PV) |
A |
100 % |
3,915 |
1 x 3,915 = 3,915 |
B |
100 % |
540 |
1 x 540 = 540 |
C |
2 / 11 = 18.2 % |
4,061 |
0.182 x 4,061 = 739.10 |
Cumulative Totals |
5,194.10 |
Status Report: Ending Day 40 (Note: We ignore all other activities that start on or after day 40).
Activity |
Planned % completion |
Cost |
Planned Value (PV) |
A |
100 % |
3,915 |
1 x 3,915 = 3,915 |
B |
100 % |
540 |
1 x 540 = 540 |
C |
100 % |
4,061 |
1 x 4,061 = 4,061 |
D |
100 % |
2,063 |
1 x 2,063 = 2,063 |
E |
100 % |
1,248 |
1 x 1,248 = 1,248 |
F |
100 % |
1,269 |
1 x 1,269 = 1,269 |
H |
100 % |
2,457 |
1 x 2,457 = 2,457 |
Cumulative Totals |
15,553 |
Summary of PV’s at end of the required periods:
Period |
PV |
10 |
3,915 |
25 |
5,194.10 |
40 |
15,553 |
Budget at Completion (BAC) = Sum of Cost of all activities = 21,478.