Question 1: The Schedule Variance Is Positive And The Cost

Question 1if The Schedule Variance Is Positive And The Cost Variance I

Identify the project status when schedule variance is positive and cost variance is negative, based on the provided options.

Question 2 involves calculating project status given specific planned value (PV), earned value (EV), and actual cost (AC) figures, and determining whether the project is over/under budget and ahead/behind schedule.

Question 3 provides Budget at Completion (BAC), Variance at Completion (VAC), and actual cost (AC) to compute the Schedule Variance (SV).

Question 4 asks about the form used to establish charge numbers in project accounting, such as cost control and management.

Question 5 examines the most appropriate method for pricing work packages within project cost control practices.

Question 6 covers the capabilities that an earned value measurement system must possess, including resource measurement, status tracking, and diagnostic functions.

Question 7 tests understanding of the 50-50 rule used in earned value management to estimate percent complete or forecast performance indices.

Question 8 focuses on types of project work that are not easily subdivided into discrete scheduled units, often referred to as level of effort activities.

Question 9 identifies the stakeholder with the greatest influence over project costs at initiation.

Paper For Above instruction

Project management encompasses a broad spectrum of tools, techniques, and principles aimed at ensuring projects are completed efficiently, within scope, time, and budget constraints. Among these tools, Earned Value Management (EVM) plays a crucial role by integrating scope, schedule, and cost measures to provide comprehensive project performance insights. Understanding the interpretation of variances, the use of forms, and role-specific influences is essential for effective project control and decision-making.

Understanding Variances and Project Status

Schedule variance (SV) and cost variance (CV) are key indicators in assessing project performance. A positive SV indicates that the project is ahead of schedule, whereas a negative CV suggests that the project is over budget. The combination of these variances determines the project's overall health. For instance, if the schedule variance is positive and the cost variance is negative, the project is progressing faster than planned but incurring higher costs, leading to the conclusion that the project is over budget but ahead of schedule, making option c the correct choice. This scenario is common in projects where early acceleration leads to increased expenses, such as expedited procurement or resource crunches.

Analyzing Project Status Through PV, EV, and AC

In the second question, the status of a project with PV = $100, EV = $200, and AC = $300 can be determined by calculating the key performance indices. Since EV exceeds PV, the project has earned more value than planned, suggesting it is ahead of schedule. However, the actual cost exceeds the earned value, indicating an over-budget status. Consequently, the project is over budget and ahead of schedule, corresponding to option a. Understanding these indices assists project managers in making informed decisions about resource allocations and schedule adjustments.

Calculating Schedule Variance (SV)

Given BAC = $1000, VAC = $200, and AC = $400, the Schedule Variance (SV) can be determined by the formula: SV = EV - PV. However, since EV is not explicitly provided, it must be derived or assumed. If the VAC indicates the expected variance, and the total planned value is known, the calculation becomes somewhat complex. Nonetheless, based on provided options, the value that aligns with typical interpretation is $600, which corresponds to option b. Accurate SV calculations enable project managers to assess whether the project is on schedule and to implement corrective actions where needed.

Forms and Methodologies in Project Cost Management

The form used to establish charge numbers is typically a work authorization form, which authorizes specific work and associated costs. This ensures proper tracking and control of expenditures. Other options like the responsibility assignment matrix provide role-specific task assignments, but do not directly serve as charge number establishments. The correct answer is c, the work authorization form, which formalizes the authorization process for work and costs.

Pricing of Work Packages

The preferred method for pricing work packages involves using average departmental labor rates, which incorporate all relevant costs, including wages, fringe benefits, and overheads. While actual salaries or statistics might be used in specific cases, an average labor rate provides consistency and simplifies budgeting and control processes, making option c the best choice. This approach aligns with standard cost estimating practices in project management.

Capabilities of Earned Value Measurement Systems

An effective earned value measurement system must be capable of measuring resources consumed, assessing project status and accomplishments, and providing diagnostic data for potential replanning. These functions enable proactive management and accurate performance tracking, thus support all three listed functions, indicating that option d, all of the above, is the correct answer.

The 50-50 Rule in Earned Value Management

The 50-50 rule estimates the percentage of work completed by taking 50% of the planned value at the start and adding 50% of the remaining value as progress. This rule is used primarily to estimate the Estimate at Completion (EAC) and performance indices. Therefore, the correct choice is b, EAC.

Levels of Effort in Project Work

Work that does not produce tangible deliverables or discrete scheduled units, such as ongoing support functions, is classified as level of effort (LOE) work. LOE tasks are characterized by their continual nature, often supporting the primary project activities without measurable incremental outputs, making option c the correct answer.

Stakeholder Influence on Project Costs

The person or group with the greatest ability to influence project costs during initiation is typically the project sponsor or owner, as they control funding and approve scope changes. The project owner or customer/owner is, therefore, the most influential stakeholder during the project's earliest phases, corresponding to option c.

Conclusion

Proficient project management requires not only understanding the technical metrics such as schedule and cost variances but also the processes and roles involved in maintaining control. Effective use of forms, methods for pricing work, and knowledge of stakeholder influence are all crucial in ensuring project success. As demonstrated, interpreting variances accurately and selecting appropriate methodologies underpin the ability to deliver projects on time, within scope, and under budget.

References

• Project Management Institute. (2017). A Guide to the Project Management Body of Knowledge (PMBOK® Guide) — Sixth Edition. PMI.
• Morris, P. W., & Pinto, J. K. (2004). The Wiley Guide to Project Control. John Wiley & Sons.
• Charvat, J. (2003). Project Management Methods. Wiley.
• Kerzner, H. (2013). Project Management: A Systems Approach to Planning, Scheduling, and Controlling. Wiley.
• Hendrickson, C., & Au, T. (2004). Project Management for Construction. Prentice Hall.
• Gido, J., & Clements, P. (2018). Successful Project Management. Cengage Learning.
• Meredith, J. R., & Mantel, S. J. (2014). Project Management: A Managerial Approach. Wiley.
• Milosevic, D. Z., & Patanakul, P. (2015). Cost and schedule control in project management. Journal of Modern Project Management.
• Sower, V. E. (2008). Practical project management: Connecting practice and people. Wiley.