Table 3 shows the activities to be undertaken by Manu Fact Corporation in creati
ID: 330397 • Letter: T
Question
Table 3 shows the activities to be undertaken by Manu Fact Corporation in creating a new air pollution detection device 3. Table 3 Forecast Activities PredecessorDuration (Days) Forecasted Quantity of Resources per Day Actual Duration (Days) Actual Quantity of Resources per Day na na na na Budgeted resource price- $150/unit; Actual resource price-$120/unit (a) Calculate the following: Budget at Completion (BAC) ii. Actual costs (AC) iii. Cost Variance (CV) iv. Schedule Variance (SV) v. Cost Performance Index (CPI) vi. Schedule Performance Index (SPI) vii. Variance at Completion (VAC) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (3 marks) (3 marks) vii. Resource Price Variance (RPV) per activity ix. Resource Quantity Variance (RQV) per activity (b) What conclusions can you draw about the progress of the project in terms of time, cost and resources? (5 marks)Explanation / Answer
Forecasted Duration of the project = Forecasted Duration of all the activities = 5+6+3+3+5 = 22 days
Forecasted Units of Resource Required = Sum of (Forecasted Duration of Each activity * Forecasted Quantity of Resources per day for each activity) - Refer Tale Below
Thus Total Unit of Resources Forecasted = 64
Budgeted Resource Price = $150/ unit
i) Budget at Completion = 64*150 = $9600
ii) Actual Cost
Actual Units of Resources consumed for activities completed is calculated in the table below
Thus Actual Units of Resources Used = 26
Actual Resource Price = $120/ unit
Thus Actual Cost = 26*120 = $3120
iii) Cost Variance = Earned Value - Actual Cost
Earned Value = Budgeted Value of Tasks Completed i.e Forecasted Value of Tasks A, B & C
From the First Table, Forecasted Resource units for Tasks A,B & C = 25+12+9 = 46
Thus Earned Value = Forecasted Resource for A, B & C * Budgeted Resource Price = 46*150 = $6900
Thus Cost Variance = 6900 - 3120 = 3780
iv) Schedule Vairance = Earned Value - Planned Value
Earned Value calculated above.
Planned Value = Forecasted Value of tasks that were supposed to be completed by 9 Days (9 Days because 9 days of work has been done actually - 2+6+1)
Thus Planned Value = Forecasted Value of A + Forecasted Value of B + 0.66*Forecasted Value of C - This is the amount of work Forecasted to be completed by Day 9
Thus using Values from the first table we get
Planned Value = (25+12+0.66*9)* 150 = $6450
Thus Schedule Variance = 6900 - 6450 = $450
v) Cost Performance Index = Earned Value/Actual Cost = 6900/3120 = 2.212
vi) Schedule Performance Index = Earned Value/Planed Value = 6900/6450 = 1.07
vii) Variance At Completion = BAC - EAC
EAC = BAC/CPI = 9600/2.212 = 4340
Variance at Completion = 9600 - 4340 = 5260
b) Conclusion on progress of project: Project is progressing ahead of forecasted time and under forecasted cost and resources. This can be seen by value of SPI & CPI both being greater than Zero
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