Need Help answering this problem dont worry about question #4 as it realates to

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Need Help answering this problem dont worry about question #4 as it realates to my specefic project. Thanks!

Overview: Earned Value Analysis (EVA) and Milestone Analysis are two methods that are often used to control costs. After establishing the cost baseline (budget), it is important to monitor the value of activities against actual expenditures over a time period Objective Upon completion of this assignment students should be familiar with earned value analysis terminology. Students will use the method to complete simple calculations and build skill that helps them find out whether they are ahead or behind the plan Answer the following questions and complete the problem 1) How does earned value help provide insight into project schedule and costs status? 2) Why is it important for project managers to resist changes to the project baseline? 3) Under what conditions would a project manager want to make changes to a baseline? Provide a specific example 4) Discuss how this method can be applied to your class project. Provide a specific example 5) Solve the following problem Given the following information for the latest period (5) Actual costs to date are $550 The original budget through period 5 was $350 The revised costs for the project at completion (EAC) are $9,000 The sum of the earned values to date is $400 The total original budget (BAC) for the project was $7,000 The reserve/contingency fund has not yet been used a. What is the cost variance at the end of period 5? b. What is the schedule variance at the end of period 5? Given the current information, will the project finish on schedule and on budget? Justify your answer c.

Explanation / Answer

Earned Value Analysis is an industry standard method of measuring a project's progress. It helps in forecasting project completion date and final cost, by analysing variances in the schedule and planned budget as the project progresses. At any given point in time, it serves as a reality check whether the implementation is meets the planning or not. It provides early signs for course correction if needed.

It is important for managers to resist change sto project baseline so that projects can be completed within the budget. Not completing witin budget may have larger implications for a firm in terms of profitability, reputation and regulations. Having said that, baseline may be changed when necessary to do so because of wrong budgeting and missing some critical / new factors in the original budget.

Project managers may want to change the baseline in case an important cost factor, new regulatory requirement has been missed in the original budget or if client requirements change. For example, client wants a mobile app in addition to a website to be designed as part of the assignement. The mobile app was not there in the original scope and hence not budgeted for. The cost for extra skilled resources will now need to be budgeted which will change the baseline.

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