Question

A road resurfacing and barrier protection project, planned to take 30 weeks to complete, is underway. Week 35 of the project has just ended. You are to use the Earned Value Analysis technique with the data provided in Table A1, to monitor the project's progress and answer the following question: a) Assuming nothing changes, work out the new total estimated cost at completion and the new to estimated time at completion (to 1 decimal place). D) What does your answer tell you about the project, that is, by how much will the project cost and time vary? Note 1: Show any calculations. Note 2: The Earned Value column in the table below has purposely been left blank Table A1. Task progress. BUDGETED COST(E) TASK DONE ACTUAL COST (E) EARNED VALUE week (E) 800 ! ΑΙ BT Yes Yes Yes 3,500 4,500 3,000 1,000 12,800 Yes 12.500 TODAY (week 15) F 14,000 5,500 4,000 2,500 Project END 30 [13 marks]

Answer 1

Here, if we total up the costs associated with each task A to I, all through the project duration, we get BAC (Budget at completion), which is simply the total budget cost of the project.

Adding up all , we get BAC = 38,800

Further, at the end of week 15, budgeted cost should be 12,800. So, Planned Value (PV) = 12,800

Calculating Earned Value (EV) as the budgeted cost of tasks completed by adding budgeted costs of tasks completed till week 15, i.e., A , B, C and D = 800 + 3500 + 4500 + 3000, we get EV = 11,800

Further, since the question says that 'assuming nothing changes', which means the time and cost trend till week 15 will continue till week 30, we need to calculate Estimated cost at completion (EAC) under hybrid scenario, wherein EAC formula is :

EAC = AC + ((BAC-EV)/(SPI*CPI))

CPI (Cost Performance Index) is basically how cost has performed till date. And in typical case, it is required since the pattern till date will continue in the remaining period of the project too.

CPI = Earned value (EV) / Actual Cost (AC)

= 11800 / 12500 (12500 being the actual cost till week 15) = 0.944

SPI (Schedule Performance Index) = EV / PV = 11800/12800 = 0.9218

CPI = 0.944

So, EAC = 12500 + ((38800-11800) / (0.9218*0.944)

= 43,525.6

Variance at Completion (VAC) or Cost Variance = BAC - EAC = 38,800 - 43,525.6

= - 4725.6

Therefore, the project will cost additional 4725.6 at completion assuming the condition that nothing changes.

Further, Schedule Variance (SV) = Earned Value (EV) - Planned Value (PV)

= 11800 - 12800 = -1,000

Since SV is <0, the project is behind schedule.