For The Following Test Marketing Project At Week 6a

For The Following Test Marketing Project At Week 6a Ignore The Far

For the following test marketing project at week 6: a. Ignore the far right “% Complete” column and using the 50–50 percent completion rule for PV and EV, calculate the cost, schedule, and time variances. Also calculate the CPI, SPI, CSI, and the ETC and EAC. b. Repeat the calculations in a, but now using the “% Complete” column. Assume that the PV values are based on time proportionality but the “% Complete” values for EV are from the workers actually doing the tasks. (See attached document for chart)

Paper For Above instruction

The process of project monitoring and control is essential in managing complex projects effectively, particularly in areas like test marketing where timelines and budgets are crucial. At week 6 of a test marketing project, evaluating project performance involves analyzing cost and schedule variances and performance indices to ensure the project is on track or identify deviations early. The task specifies two different approaches to such analysis: one with the assumption of a 50–50 percent completion rule and another based on actual percent complete data by workers.

In the first approach, using the 50–50 rule, the earned value (EV) is presumed to be 50% of the planned value (PV) at any given point, disregarding actual progress. This approximation is often used when accurate percent complete data is unavailable or unreliable. Calculations include cost variance (CV), schedule variance (SV), cost performance index (CPI), schedule performance index (SPI), cost schedule index (CSI), estimated total cost (ETC), and estimate at completion (EAC).

Cost variance (CV), which indicates the difference between earned value and actual cost (AC), is computed as CV = EV - AC. When EV is based on the 50–50 rule, the EV is half of PV. Similarly, schedule variance (SV) measures the deviation in schedule as SV = EV - PV. The CPI, a measure of cost efficiency, is calculated as CPI = EV / AC, and the SPI, indicating schedule adherence, is SPI = EV / PV. The CSI (Cost Schedule Index) can be derived from these metrics or as a combination, depending on project methodology.

In the second approach, using actual percent complete data from worker reports, EV is calculated directly as the PV multiplied by the percentage of work done, providing a more realistic measure of performance at week 6. Similar calculations for CV, SV, CPI, SPI, and CSI follow, but this method often reveals different insights into project health, especially if the actual progress deviates significantly from planned progress.

Estimating ETC involves projecting remaining work cost based on current CPI, with the formula ETC = (BAC - EV) / CPI, where BAC is the budget at completion. EAC adjusts the total forecast cost; if work performance remains consistent, EAC can be calculated as EAC = AC + ETC.

In conclusion, these calculations at week 6 provide vital insights into project performance and guide managerial decisions. The choice between using the 50–50 rule or actual percent complete data impacts the interpretation of project health, highlighting the importance of accurate data collection and analysis in project management.

References

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