Assume the following: You are a contractor and have just been awarded a Greenfield Project. A budget has been established to install 20,000ft of pipe at an estimated 15,000 man hours and an estimated billable cost of $700,000. The original schedule planned for 4,000ft of pipe to be installed per day by a 300-man crew working a 10-hour shift (anticipated). The job was scheduled to start in Monday and finish on Friday. On Monday 2,000 ft of pipe was installed. On Tuesday 3,500 ft of pipe was installed and on Wednesday 1,000ft of pipe was installed. Actual cumulative man hours incurred to-date is 9,500 hrs. In addition, your crew has installed 1,200ft of pipe and has incurred 2,040 of man hours to-date working on Change Orders. Note: Assume that $200,000 has been billed to the client to-date.
1.Current schedule variance | ||
Upto Wednesday | ||
Budgeted man-hrs. | 300*10*3= | 9000 |
Actual man-hrs.(9500-2040) | 7460 | |
Schedule variance= | 1540 | |
2.Current cost variance | ||
Budgete costs upto Wednesday | 700000/5= | 140000 |
Actual billed upto Wednesday | 200000 | |
Cost Variance | -60000 |
3.Man hours left to be earned | |
Budgeted man-hrs | 15000 |
Actual man-hrs.so far(9500-2040) | 7460 |
Man-hrs. left to be billed | 7540 |
4.Current projected EAC (Estimate at Completion) in terms of man hours | |
700000/15000*7540= | |
351867 | |
5.Impact of the Change Orders on your project schedule | |
in $ terms | |
700000/15000*2040= | |
95200 | |
6.Construction cost being floated by the contractor | |
200000/(9500-2040)*7540= | |
202145 |
7.Suggestions based on the calculated results | |
1. Change orders have consumed almost 14% of the billable amt.estimated | |
2. Even with that, amt. as per 6+the impact of change orders works out to a total os $ 297345 ,ie.< the estimate as per 5. | |
3. The cost variance is due to the change order costs , net of which it looks favourable variance , from the estimate. | |
4. It is suggetsed to avoid repeat/change work. | |
Assume the following: You are a contractor and have just been awarded a Greenfield Project. A...
Assume the following: You are a contractor and have just been awarded a Greenfield Project. A budget has been established to install 20,000ft of pipe at an estimated 15,000 man hours and an estimated billable cost of $700,000. The original schedule planned for 4,000ft of pipe to be installed per day by a 300-man crew working a 10-hour shift (anticipated). The job was scheduled to start in Monday and finish on Friday. On Monday 2,000ft of pipe was installed. On...
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