If Your Last Name Begins A Through L, Address The Following

If Your Last Name Begins A Through L Address The Following Question

If your last name begins A through L, address the following question. Be sure to show ALL calculations and explain what your answers tell you. You have just taken over a project from another project manager. Incomplete information is available to you on the project status. You have been told that the cost performance index (CPI) = .92, the earned value (EV) = $322,000 and the planned value (PV) = $180,000.

What is the actual cost (AC) for the project? What’s the schedule variance (SV) for the project? What about the SPI and the CSI? If your last name begins M through Z, address the following question. Be sure to show ALL calculations and explain what your answers tell you.

Activity A is worth $200, is 100% complete, and actually cost $200. Activity B is worth $75, is 90% complete, and actually cost $120 so far. Activity C is worth $200, is 75% complete and has cost $175 so far. The total budget is $1000. Find the project’s: ETC, VAC, CPI, CV, PV, and EAC. Submit your post to Discussion 6.1 by the designated due date.

Paper For Above instruction

Introduction

Effective project management relies heavily on accurate performance measurement and control. Quantitative metrics such as the Cost Performance Index (CPI), Schedule Performance Index (SPI), Variance at Completion (VAC), Estimate at Completion (EAC), and others provide vital insights into project status, enabling project managers to make informed decisions. This paper analyzes the given project data to compute critical performance indicators and interpret their implications in project control.

Part 1: Calculation for Last Name A-L (Incomplete project data)

The project data provided indicates a Cost Performance Index (CPI) of 0.92, an Earned Value (EV) of $322,000, and a Planned Value (PV) of $180,000. From these figures, we aim to determine the Actual Cost (AC), Schedule Variance (SV), Schedule Performance Index (SPI), and the Cost Schedule Index (CSI).

Actual Cost (AC)

The CPI is calculated as:

CPI = EV / AC

Rearranged to solve for AC:

AC = EV / CPI

Substituting the given values:

AC = $322,000 / 0.92 ≈ $35,000

This value suggests that the actual cost incurred so far is approximately $350,000 (since the units of EV are in dollars, we must ensure consistent units). Noticing that the EV is $322,000, dividing by 0.92 yields:

AC ≈ $350,000

Schedule Variance (SV)

SV measures the schedule performance and is calculated as:

SV = EV - PV

Using the provided data:

SV = $322,000 - $180,000 = $142,000

A positive SV indicates the project is ahead of schedule in terms of budgeted work value.

Schedule Performance Index (SPI)

SPI is the ratio of EV to PV:

SPI = EV / PV = $322,000 / $180,000 ≈ 1.79

An SPI greater than 1 indicates the schedule performance exceeds the planned progress, suggesting the project is ahead of schedule.

Cost Schedule Index (CSI)

CSI can be interpreted similarly to CPI and SPI, representing integrated cost and schedule performance. It is often calculated as:

CSI = (EV / PV) (CPI) = SPI CPI ≈ 1.79 * 0.92 ≈ 1.648

This index indicates overall performance effectiveness in cost and schedule alignment.

Interpretation

The calculation shows the project currently exceeds its planned schedule, with an SPI of approximately 1.79, implying early completion relative to plan. The CPI of 0.92 indicates slightly higher costs are being incurred than the value of work performed per dollar spent, but the overall cost efficiency remains acceptable.

Part 2: Calculation for Last Name M-Z (Detailed project analysis)

Given data includes three activities:

  • Activity A: Worth $200, 100% complete, actual cost $200
  • Activity B: Worth $75, 90% complete, actual cost $120
  • Activity C: Worth $200, 75% complete, actual cost $175

The total project budget is $1000.

The goal is to compute the Estimated Time to Complete (ETC), Variance at Completion (VAC), Cost Performance Index (CPI), Cost Variance (CV), Planned Value (PV), and Estimate at Completion (EAC).

Calculations

1. Earned Value (EV)

For each activity, EV is the percentage of work completed multiplied by the budgeted amount:

  • Activity A: 1.00 * $200 = $200
  • Activity B: 0.90 * $75 = $67.50
  • Activity C: 0.75 * $200 = $150

Total EV = $200 + $67.50 + $150 = $417.50

2. Actual Cost (AC)

Sum of actual costs:

  • Activity A: $200
  • Activity B: $120
  • Activity C: $175

Total AC = $200 + $120 + $175 = $495

3. Cost Variance (CV)

CV = EV - AC = $417.50 - $495 = -$77.50

Negative CV indicates the project is over budget by $77.50.

4. Cost Performance Index (CPI)

CPI = EV / AC = $417.50 / $495 ≈ 0.843

A CPI less than 1 indicates cost inefficiency.

5. Variance at Completion (VAC)

VAC = Budgeted Cost (BAC) – EAC

First, calculate EAC.

6. Estimated at Completion (EAC)

Assuming that current CPI will persist, EAC is calculated as:

EAC = Budget at Completion (BAC) / CPI

BAC = $1000

EAC = $1000 / 0.843 ≈ $1184.21

7. Estimate to Complete (ETC)

ETC = EAC - AC = $1184.21 - $495 ≈ $689.21

The remaining work is estimated to cost approximately $689.21 to complete.

8. Variance at Completion (VAC)

VAC = BAC - EAC = $1000 - $1184.21 ≈ -$184.21

The negative VAC signifies the project is expected to be over budget by about $184.21 at completion.

9. Planned Value (PV)

Assuming a linear planned performance, if the project is, for example, 70% complete now, PV is 70% of BAC:

PV = 0.70 * $1000 = $700

This indicates planned expenditure up to this point.

10. Summary of performance indices

The CPI of 0.843 signals cost inefficiency, requiring control on cost management strategies. The overrun of approximately $184 at EAC shows a need for corrective actions to align planned and actual performance.

Conclusion

Performance measurement metrics such as CPI, SV, SPI, VAC, and EAC are crucial tools for project managers to assess project health and forecast outcomes. In the first scenario, the project demonstrates good schedule performance but slightly compromised cost efficiency. In the second scenario, the project faces cost overruns and forecasts exceeding the original budget, underscoring the importance of proactive project controls. Regular monitoring and adjustment are essential to steer projects toward successful completion within scope, schedule, and budget constraints.

References

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  • Haughey, D. (2020). Project Budgeting and Cost Control. Project Management Institute.
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