Earned Value Problems Of The Three Below, Choose ✓ Solved

Earned Value Problems Of the three problems below, choose

Of the three problems below, choose and solve one problem. Show your work. Along with your answer, define each term and explain the significance (meaning) of the solution.

  1. During a project, Earned Value Analysis is performed and gives the following numbers: EV: 523,000; PV: 623,000; AC: 643,000. Which results are correct?
    • A. CV: +120,000; SV: +100,000
    • B. CV: +100,000; SV: +120,000
    • C. CV: -100,000; SV: -120,000
    • D. CV: -120,000; SV: -100,000
  2. You found the following Earned Value Analysis information for a recently closed out project: SPI = 0.7, CPI = 1.0
    • A. The project has been cancelled while it was executed. At that time the project was behind schedule and on budget.
    • B. The project's deliverables have all been finished. The project came in ahead of schedule but on budget.
    • C. The project's deliverables have all been finished. The project came in on schedule but over budget.
  3. You are assigned as the project manager to a project which had a one-time cost variance in the past caused by unexpected rework which has meanwhile been finished. You perform Earned Value Analysis and find the following results: EV: 250,000; PV: 200,000; AC 275,000 BAC is 500,000. What is right?
    • A. EAC = 550,000
    • B. EAC = 525,000
    • C. EAC = 500,000
    • D. EAC = 425,000

Paper For Above Instructions

For this assignment, the chosen problem is the first one based on Earned Value Analysis which provides three important metrics: Earned Value (EV), Planned Value (PV), and Actual Cost (AC). Each of these terms plays a crucial role in project management as they help to assess the project's performance and health.

Definitions of Terms:

  • Earned Value (EV): The measure of work performed expressed in terms of the budget authorized for that work. In this case, EV is 523,000.
  • Planned Value (PV): The estimated value of the work planned to be done by a specific time. Here, PV is 623,000.
  • Actual Cost (AC): The actual costs incurred for the work performed during a specific time period. The AC provided is 643,000.
  • Cost Variance (CV): A measure of cost performance on a project, calculated as CV = EV - AC. It indicates whether a project is under or over budget.
  • Schedule Variance (SV): A measure of schedule performance on a project, calculated as SV = EV - PV. It indicates whether a project is ahead or behind schedule.

Analysis

To find the correct results from the options provided, we will calculate the Cost Variance (CV) and Schedule Variance (SV) using the formulas defined above.

Calculating CV:

CV = EV - AC = 523,000 - 643,000 = -120,000

Calculating SV:

SV = EV - PV = 523,000 - 623,000 = -100,000

Now, the results we obtained are:

  • CV: -120,000
  • SV: -100,000

Based on these calculations, the correct answer among the provided options is:

D. CV: -120,000; SV: -100,000

Significance of the Solution:

Understanding the significance of CV and SV is essential for project managers. The negative values indicate that the project is over budget and behind schedule. Specifically:

  • A CV of -120,000 means that the project has exceeded its budget by 120,000, signaling potential problems that could affect future funding or project completion timelines.
  • A SV of -100,000 shows that the project is progressing more slowly than planned, which could impact overall project deadlines and deliverables.

This analysis allows project managers to take corrective actions to realign their budget and scheduling plans. They can use these insights to identify issues and adapt their strategy in real-time, ensuring that the project remains feasible and viable.

Overall, proper application of Earned Value Management provides a structured approach to gauge project performance and drive necessary adjustments for project success.

References

  • Fleming, Q. W., & Koppelman, J. (2016). Earned Value Project Management. Project Management Institute.
  • Kerzner, H. (2017). Project Management: A Systems Approach to Planning, Scheduling, and Controlling. Wiley.
  • PMI. (2017). Practice Standard for Earned Value Management. Project Management Institute.
  • Schwalbe, K. (2019). Information Technology Project Management. Cengage Learning.
  • Turner, J. R. (2014). Governance of Project Management. Gower Publishing, Ltd.
  • Christensen, J. (2018). Project Management for the Unofficial Project Manager. Berrett-Koehler Publishers.
  • Wysocki, R. K. (2014). Effective Project Management: Traditional, Agile, Extreme. John Wiley & Sons.
  • Young, T. L. (2017). The Value of Earned Value. Project Management Journal.
  • Baker, L. (2015). Mastering Earned Value Management: Overview and Implementation. Business Management Review.
  • Greer, C. F. (2018). Earned Value Management and the Value of Data. International Journal of Project Management.

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