3. Assume that you have completed three months of the project. The BAC was $120,

Question

3. Assume that you have completed three months of the project. The BAC was $120,000 for this six-month project. You can also make the following assumptions: PV S60,000 EV $55,000 AC $50,000 What is the cost variance, schedule variance, cost performance index (CPI), and schedule performance index (SPl) for the project? How is the project doing? Is it ahead of schedule or behind schedule? Is it under budget or over budget? Use the CPI to calculate the estimate at completion (EAC) for this project. Is the project performing better or worse than planned? a. b. c. d. Use the SPI to estimate how long it will take to finish this project Sketch an earned value char using the information from your answers to parts a through d. Use Figure 7-5 as a guide. e.

Explanation / Answer

1. Cost Variance = Earned Value - Actual Cost = 55000 - 50000 = 5000
Schedule Variance = EV - PV = 55000 - 60000 = -5000
CPI = EV/AC = 55000/50000 = 1.1
SPI = EV/PV = 55000/60000 = 0.92

2.The project is $5000 underbudget and $5000 behind schedule

3. ETC = (BAC - EV)/CPI
= (120000 - 55000)/1.1
= $59090.91

EAC = AC + ETC = 50000 + 59090.91 = $ 109090.91

4. Estimated time to complete = 3/.92 = 3.26 months

It will take 0.26 months longer than planned

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