Question 2 (10 marks) You are in charge of building a new office for your compan
ID: 1214592 • Letter: Q
Question
Question 2 (10 marks)
You are in charge of building a new office for your company. After some discussion with your builder, you identified some of the key tasks, the duration and the costs to complete the building. As you are a project manager you have decided to monitor the building progress using Earned Value Management (EVN). Answer the following questions using the following information
ID
Task Name
Cost ($)
Start Date
Duration
1
Lay foundations
18,000
November 1
2 weeks
2
Build frame
34,000
November
4 weeks
3
Install pipes and electrical
10,000
December
6 weeks
4
Make office water-tight
15,000
February
8 weeks
5
Install internal walls and bathroom
20,000
April
12 weeks
6
Install cabinetries
14,000
July
4 weeks
7
Paint office
8,000
August
2 weeks
8
Install light fixtures and appliances
9,000
August
2 weeks
NOTE: Assume that no task is scheduled to run concurrently, e.g., Task 2 starts after Task 1 completes, Task 3 starts only when Task 2 completes, and so on. Also, assume that each month is made up of exactly four weeks.
What is the planned value of the entire project?
[1 mark]
The project manager has managed to keep cost to what was originally budgeted above. At this point, the project has completed Task 4. Up to this point,
What is the planned value of the project?
What is the actual cost (AC) of the project? Briefly explain how you derive the actual cost.
What is the rate of performance (RP) for each task? Using the RPs obtained, calculate the Earned Value (EV), Schedule Variance (SV), Cost Performance Index (CPI), and Schedule Performance Index (SPI) of the project.
[1 + 1 + 1 = 3 marks]
Unfortunately, two trades resigned after Task 5 was completed and this caused the remaining tasks to exceed its original cost and schedule by 25%, 30%, 40% respectively. At the end of the project,
What are the CPI and SPI?
How is the performance with respect to cost and time?
Represent the Planned Value (PV), Earned Value (EV) and Actual Cost (AC) in a chart
[1 + 1 + 4 = 6 marks]
ID
Task Name
Cost ($)
Start Date
Duration
1
Lay foundations
18,000
November 1
2 weeks
2
Build frame
34,000
November
4 weeks
3
Install pipes and electrical
10,000
December
6 weeks
4
Make office water-tight
15,000
February
8 weeks
5
Install internal walls and bathroom
20,000
April
12 weeks
6
Install cabinetries
14,000
July
4 weeks
7
Paint office
8,000
August
2 weeks
8
Install light fixtures and appliances
9,000
August
2 weeks
Explanation / Answer
Planned value= 128000
2) 77000(up to task 4)
3)Actual cost= 128000
4. Rate of performance= 102400/ 128000 x 100=8%
5. Rate of performance = 12% (approx.)
6. Earned value= 128000/8=16000
7. Variance = 9000 - 128000 / 9000 + 128000 = 0.8%
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