You are the project manager for a project to add functionality to your company’s

Question

You are the project manager for a project to add functionality to your company’s web site. The project has been broken down into four iterations (releases). Each of the iterations will take 20 days to complete at a cost of $20,000 per iteration. Today is the end of what should be iteration three. The current status of the project is as follows: Iteration One complete, spent $20,000 Iteration Two complete, spent $25,000 Iteration Three half done, spent $17,000 Iteration Four Not started. Please provide the following values: PV, EV, AC, CPI, SPI, EAC, ETC, BAC Also, do you get 75% completion for iteration 3? If so how did you come up with this answer when it says that iteration 3 is half (50%) complete? Thank you.

Explanation / Answer

Project Duration = 20 x 4 =80 days
BAC = $20,000 x 4 = $80,000

No, we donot get 75% completion for iteration 3.

% completed = (100 + 100 + 50 + 0)/400 * 100 = 62.50%

Formula : Planned Value = (Planned % Complete) X (BAC)
PV= 75% of 80,000
= 60,000/-

Formula Earned Value = (% of completed work) X (BAC)
EV = 62.50% 0f 80,000
= 50,000/-

Actual cost is the total amount that is spent.
AC = $20000 + $25000 + $17000
= $62,000

Formula : CPI = EV/AC
CPI = 50000/62000
= 0.80

CPI < 1 the cost of completing the work is higher than planned.
CPI = 1 the cost of completing the work is right on plan.
CPI > 1 the cost of completing the work is less than planned.

Formula : SPI = EV/PV
SPI = 50000/60000
= 0.83

SPI < 1 we are behind schedule.
SPI = 1 we are on schedule.
SPI > 1 we are ahead schedule.

Formula : ETC= (BAC-EV)/CPI
ETC = (80,000 - 50,000)/ 0.83
= 36,144/-

Formula : EAC= AC+ ETC
EAC = 80,000 + 36,144
= 116,144/-

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