¶ … project budget of $500,000. The project is a 10-month project and the budget analyst planned to spend $50,000 per month on the project. At month 6, you review the project status and you realize the project is 40% complete. Assume you are at the end of month 6 and will include month 6's work into your EV calculation. The project has spent $425,000 to date. Using the formulas from your book, answer the following questions:
PV = Planned Value is the Scheduled Value = 6 months * $50,000 per month = 300,000
EV = % Complete * Original Budget = 40% * 500,000 = 200,000
AC = Actual Cost of the Work Completed = 425,000 (Given)
SV = EV -- PV = 200,000 -- 300,000 = -100,000
CV = EV -- AC = 200,000 -- 425,000 = -225,000
BAC = Baseline Costs = 500,000 (Given)
EAC = AC + ((BAC -- EV) / CPI) = 425,000 + ((500,000 -- 200,000) / .47) = 1,063,297.83
CPI = Cost Performance Index = EV / AC = 200,000 / 425,000 = .47 = 47%
SPI = Schedule Performance Index = EV / PV = 200,000 / 300,000 = .67 = 67%
Question 2: What does a SPI < 1 indicate?
A schedule performance index that equals a value less than one basically means that the projects schedule is behind its estimated planned baseline. This is evident since the value actually earned is less than the value that was planned to earn at that point in time. If the SPI value is greater than one then that would mean that the project has earned more value at that point in time than it had planned on earning.
Question 3: How does applying earned value calculations help determine project performance in terms of schedule and budget?
Earned value calculation can help gauge a projects performance in a variety of ways. Comparing the earned value to the planned value provides a metric that can help evaluate the project in terms of its scheduling performance. For example, if you planned to earn 80% of the projects value in six months, but you only earned forty percent of that planned value then you would immediately know that you are significantly behind schedule. Determining the cost variance can also utilize the earned value to help provide insights into the project's financial performance. If you projected an earned value that was less than the actual costs then your cost variance would be a negative value and this would represent the fact that the project is under budget for the work performed. These are only a couple examples of how calculations including earned value estimates can serve as a useful metric for any project.
Validating the Concept of Earned Value Management It is important to note, from the onset, that most companies have in the past made extensive use of planned costs and actual costs in seeking to track project costs. In this case, if all the funds assigned to a specific project are used up, then the target is seen as having been hit. However, a cost under-run is perceived is less funds are
Progress and Performance Monitoring With any project that's intricate, involved and worth completing, the progress and performance need to be consistently monitored. Proper project monitoring allows all stakeholders in the project to determine if the project is on course or not. One method of monitoring the success and development of a project is via performance indicators. These indicators are flags which provide proper image of a project's impact, outcomes, outputs, and
Introduction During the implementation of a project, processes for project control along with record keeping come to be vital components to managers and other participants in the entire project process. Imperatively, these components provide the twofold objective of recording the financial transactions that take place in addition to handing managers a sign of the progress and the issues linked with the project. Notably, the issues of project cost control are fittingly
Wal-Mart Corporation Mission and Vision Statement Analysis Linking Wal-Mart's Mission and Vision to Their Strategic Goals ands Objectives Assessing the Link Between Wal-Mart's Financial Performance And Its Strategic Goals Wal-Mart Competitive and Marketing Analysis Wal-Mart Marketing Analysis Selecting An Appropriate Strategy (low cost, differentiation or niche) For Maximizing Organization's Return on Shareholders Potential Wal-Mart Merger & Acquisition Strategy Incentive and Reward Strategies for Wal-Mart Employees Evaluating How Current Strategies Define Ethicacy Levels at Wal-Mart Wal-Mart Ratio Analysis Income Statement Analysis,
S. Air Force. During the heyday of defense contracting in the 1950s and 1960s, it became apparent to the Defense Department that as projects get larger and more complex, it becomes increasingly difficult to track what is happening on them. This problem is compounded by the fact that these large projects are being carried out in multiple contractor organizations, each of which employs its own peculiar planning and control system
Quality Improvement Program Needs Assessment and Quality Improvement Plan Paula Stechschulte, PhD, RN Quarter This paper discusses the process of drafting a quality improvement plan at a community level medical facility, a plan that is aimed at reducing days under urinary catheter and also reducing the rates of infections associated with the said catheters. As a high rate of incidence of infection related to catheter usage is costly for the hospital, this implementation
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now