Consider the following project activities: Activity Name Immediate Predecessor (
ID: 3818206 • Letter: C
Question
Consider the following project activities:
Activity Name
Immediate Predecessor (list number/ name, separated by ‘,’)
Normal Time
1
6
2
2
3
1
3
4
2
2
5
3
4
6
4
1
7
5,6
1
8
7
6
9
8
3
10
8
1
11
9,10
1
Fill the following table:
Activity Name
On Critical Path
Activity Time
Earliest
Start
Earliest
Finish
Latest Start
Latest Finish
Slack
(LS-ES)
1
6
2
2
3
3
4
2
5
4
6
1
7
1
8
6
9
3
10
1
11
1
Project Completion Time =
Weeks
Number of Critical Path(s)=
Note : On critical path column the answer ( Yes or No ).
Assume that ABC Company has invested a budget of 10 million riyals for XY project and planned to complete it in 10 months. Let’s also assume that the company planned to spend the budget equally in each month. However, when the first two months has passed, the project manager has found out that the total of one million riyals spent. Suppose RP=0.25
Based on the above scenario, answer the following:
a) What is the cost variance, schedule variance, cost performance index (CPI), and schedule performance index (SPI) for the project?
b) How much will it actually cost the company to complete this project, and how long will it really take to complete it based on the performance to date?
c) What do you think of the project performance? over/under the budget? behind /ahead the schedule? Justify your answer.
Activity Name
Immediate Predecessor (list number/ name, separated by ‘,’)
Normal Time
1
6
2
2
3
1
3
4
2
2
5
3
4
6
4
1
7
5,6
1
8
7
6
9
8
3
10
8
1
11
9,10
1
Explanation / Answer
Given:
PV = 10,00,000
EV = PV * RP = 10,00,000 * 0.25 = 250000
AC = 5,00,000
BAC = 10,000,000
Solution :
1.) Cost Variance = EV - AC
= 250000 - 500000
CV = -250000
2.) Schedule Variance = EV - PV
= 250000 - 1000000
= -750000
3.) Cost Performance Index = EV/AC
= 250000/500000
= .5 * 100
= 50%
4.) scheduled performance index = EV / PV
= 250000/1000000
= .25 * 100
= 25
b.) The project is not working well as planned. According to Schwalbe (2006, p.272) stated that “when CV is a negative number, it means that performance for the work cost more than actually planned.
In case a negative SV means that it will took longer than planned to complete the work.”
Also, “when the CPI is less than one or lower than 100 percent, the current project is over budget, and when the SPI is lower than one or 100 percent, the project is late behind schedule.
c.) Hence, with respect to the project calculated CV equals -25,00,000, SV equals -$7,50,000, the CPI is 50% less than 100 percent, and the SPI is 25% less than 100 percent, so that the project is both over budget and behind schedule.