Tony Prince And His Team Are Working On The Recreation

Tony Prince And His Team Are Working On the Recreation And Wellness In

Tony Prince and his team are working on the Recreation and Wellness Intranet Project. They have been asked to refine the existing cost estimate for the project so they can evaluate supplier bids and have a solid cost baseline for evaluating project performance. The schedule and cost goal is to complete the project in six months for under $200,000. Tasks include preparing a one-page cost model with assumptions about labor rates, no outsourced work or additional hardware costs, and breaking down costs across various Work Breakdown Structure (WBS) components such as project management, requirements definition, web site design, development, testing, and training/support. Then, allocate costs by month to create a cost baseline. After three months, with a BAC of $200,000 and actual and earned values provided, compute project performance metrics like CV, SV, CPI, SPI, and EAC, interpret the project’s status, and estimate completion time. Additionally, sketch an earned value chart based on the data provided.

Paper For Above instruction

Introduction

The development of a recreation and wellness intranet project requires meticulous financial planning and performance monitoring to ensure timely and budget-compliant delivery. This paper articulates the creation of a comprehensive cost model, the allocation of costs over the project timeline, and a performance analysis based on earned value management (EVM) techniques. The project’s constraints include a six-month completion timeline and a budget not exceeding $200,000, with defined work components under a clear Work Breakdown Structure (WBS).

Development of the Cost Model

The primary task involves constructing a detailed cost model that incorporates the project’s scope, resources, and assumptions. The model is built on a WBS that segments the project into manageable components, enabling precise cost allocation. For labor costs, the rates are $100/hour for the project manager and $60/hour for other team members. It is assumed that employment costs are solely internal employee labor, with no outsourced work or additional hardware-related costs, aligning with the project’s total estimate of $200,000.

The cost model allocates resources accordingly: project management, requirements definition, website design, development, testing, and training/support. For each WBS component, labor hours are estimated based on the scope and complexity, summing to the total budget. This structured approach ensures that each task’s share of the budget is justifiable and sensitive to project changes if needed.

Cost Baseline Allocation

Once the cost model is established, the next step is to allocate costs over the six-month project timeline. Using the total estimated cost of $200,000, costs are distributed monthly based on task duration and effort estimates. For example, initial phases like project management and requirements definition might require higher resource allocation at the onset, whereas later phases like testing and rollout might consume less budget towards the end. This distribution helps visualize the planned expenditure—forming the project’s cost baseline—against which actual performance can be monitored.

Performance Measurement after Three Months

Given the project data: Budget at Completion (BAC) = $200,000, Planned Value (PV) = $120,000, Earned Value (EV) = $100,000, and Actual Cost (AC) = $90,000, key performance indicators can be derived:

  • Cost Variance (CV) = EV - AC = $100,000 - $90,000 = $10,000 (favorable)
  • Schedule Variance (SV) = EV - PV = $100,000 - $120,000 = -$20,000 (behind schedule)
  • Cost Performance Index (CPI) = EV / AC = $100,000 / $90,000 ≈ 1.11 (cost-efficient)
  • Schedule Performance Index (SPI) = EV / PV = $100,000 / $120,000 ≈ 0.83 (behind schedule)

Project Status Analysis

The favorable CV indicates the project is under budget; however, the negative SV suggests it is behind schedule. The CPI exceeding 1 and the SPI below 1 confirm the project is cost-efficient but lagging in schedule. This discrepancy necessitates adjustment strategies to meet the upcoming project deadlines.

Estimate at Completion (EAC)

The CPI of approximately 1.11 suggests that the project’s anticipated total cost might be less than originally planned. EAC is calculated as:

EAC = BAC / CPI = $200,000 / 1.11 ≈ $180,180

This indicates the project might be completed under budget if current performance trends persist, implying that the project is performing somewhat better than initially forecast.

Schedule Adjustment & Duration Estimation

The SPI metric indicates that the project is approximately 83% through its scheduled progress at this point. To estimate the time to finish, the formula is:

Estimated Time to Complete = Remaining Work / SPI

Since the project is supposed to take six months, and three months have passed with an SPI of 0.83, the adjusted duration is roughly:

Actual duration / SPI = 3 months / 0.83 ≈ 3.61 months

Adding this to the current two-thirds completion implies an overall duration of approximately 4.4 months—meaning the project might slightly extend beyond the initial six months if the trend continues.

Earned Value Chart

The EV, PV, and AC points are plotted over time to visually represent project progress. The EV line, given at $100,000 over three months, shows actual work performed. The PV line illustrates planned progress, which was higher at this stage ($120,000), indicating that actual progress is lagging. The AC line shows the cost incurred, which is slightly lower than EV, depicting efficient spending. A graphical EV chart underscores the gap between planned and actual progress, highlighting the need for schedule acceleration while maintaining cost control.

Conclusion

This analysis underscores the importance of integrating earned value management in project oversight. While cost efficiency appears favorable, schedule delays threaten timely project completion. Moving forward, resource reallocation and schedule adjustments are crucial to align project execution with initial goals, ensuring successful delivery within scope and budget constraints.

References

  • Fleming, Quentin W., & Koppelman, J. (2016). Earned Value Project Management (4th ed.). Project Management Institute.
  • Kerzner, Harold. (2017). Project Management: A Systems Approach to Planning, Scheduling, and Controlling. Wiley.
  • PMI. (2017). A Guide to the Project Management Body of Knowledge (PMBOK® Guide) (6th ed.). Project Management Institute.
  • Schwalbe, Kathy. (2018). Information Technology Project Management (9th ed.). Cengage Learning.
  • Meredith, Jack R., & Mantel, Samuel J. (2014). Project Management: A Managerial Approach. Wiley.
  • Heldman, Kim. (2018). PMP: Project Management Professional Exam Study Guide. Sybex.
  • Gido, J., & Clements, J. (2016). Successful Project Management. Cengage Learning.
  • Hubbard, Douglas. (2019). How to Measure Anything: Finding the Value of Intangibles in Business. Wiley.
  • Levine, Harold. (2014). Guide to Project Management. McGraw-Hill Education.
  • Christenson, James A. (2010). Earned Value Project Management. Project Management Journal, 41(1), 85-95.

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