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Tutorial Earned Value Question

The document provides information and questions about monitoring the progress of two projects using earned value management. For the first project of producing LED screens, the summary calculates that after 3 months, the schedule and cost variances are negative, indicating the project is behind schedule and over budget. It estimates it will take 7 more months to complete based on a schedule performance index of 0.5. The second project provides similar initial data to calculate earned value metrics and estimates for that project. The third question asks to calculate earned value for tasks in a project given their durations, percentages completed and rates.

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33 views

Tutorial Earned Value Question

The document provides information and questions about monitoring the progress of two projects using earned value management. For the first project of producing LED screens, the summary calculates that after 3 months, the schedule and cost variances are negative, indicating the project is behind schedule and over budget. It estimates it will take 7 more months to complete based on a schedule performance index of 0.5. The second project provides similar initial data to calculate earned value metrics and estimates for that project. The third question asks to calculate earned value for tasks in a project given their durations, percentages completed and rates.

Uploaded by

nailofar
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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PROJECT MANAGEMENT CONTROL AND MONITORING

CHAPTER 8 : TUTORIAL EARNED VALUE

Tutorial : EARNED VALUE Name:


1.
2.
3.
4.
5.

Group:

Damai Sdn Bhd has awarded a contract for the production of LED Advertising Screen to
company Gembira Sdn Bhd .

The contract calls for Gembira Sdn Bhd to produce:

-500 LED Screen for Advert A and

-1,000 LED Screen for Advert B .

It further states that Gembira Sdn Bhd will produce:

- LED Screen for Advert A at the rate of 100 per month and

- LED Screen for Advert B at the rate of 250 per month.

-Production of LED Screen for Advert A is to start on January 1, and

The project plan for LED Screen for Advert A as follows:

Activity Start End Elapsed Number of Total Cost


Time Item
LED Screen Jan 1 May 31 5 months 500 RM100,000
for Advert A

A quick glance reveals that you budgeted RM200 a copy for LED Screen for Advert A
(RM100,000 / 500 copies)

Suppose it’s the end of March, and you’re three months into the project. Here’s what has
happened as of March 31:

Activity Start Elapsed Time Number of Item Total Cost

LED Screen Jan 1 3 months 150 RM45,000


for Advert A
Your job is to figure out your schedule and cost performances to date and to update your
forecast of the total amount you’ll spend for LED Screen for Advert A. Follow these steps:

1. Determine the planned value (PV), earned value (EV), and actual cost (AC) for
Brochure A and explain your results

PV = RM200 per LED Screen × 100 LED Screen per month × 3 months = RM60,000

EV = RM200 per LED Screen × 150 LED Screen = RM30,000

AC = RM45,000

2. Determine the schedule variance (SV), cost variance (CV), schedule performance
index (SPI), and cost performance index (CPI) for the production of LED Screen for
Advert A. Explain your results

SV = EV – PV = RM30,000 – RM60,000 = –RM30,000 (BEHIND SCHEDULE)

CV = EV – AC = RM30,000 – RM45,000 = –RM15,000 (OVER BUDGET)

SPI = EV / PV = RM30,000 / RM60,000 = 0.50 (BEHIND SCHEDULE)

CPI = EV / AC = RM30,000 / RM45,000 = 0.67 (COST OVERRUN)

3. Use SPI to estimate the completion time and how much longer it will take to finish this
project.

(budgeted time / SPI)

Estimate completion time , 5 months/ 0.50 = 10 months

Thus, 10 months – 3 months = 7 more months to finish the product


QUESTION 1

The contract also calls for Gembira Sdn Bhd to produce 1,000 LED Screen for Advert B.

It further states that Gembira Sdn Bhd will produce LED Screen for Advert B at the rate of
250 per month.

Production of LED Screen for Advert B is to start on February 1.

You budgeted RM100 a copy for LED Screen for Advert B (RM100,000 / 1,000 copies).

The project plan for LED Screen for Advert B as follows:

Plan for Gembira Sdn Bhd to Produce Brochures B

Activity Start End Elapsed Number of Total Cost


Time Item
Feb 1 May 31 4 months 1,000 RM100,000
LED Screen
for Advert B

Suppose it’s the end of March, and you’re two months into the project. Here’s what has
happened as of March 31:

Project Status as of March 31:

Activity Start Elapsed Time Number of Item Total Cost


Feb 1 2 months 600 RM30,000
LED Screen
for Advert B

1. Determine the planned value (PV), earned value (EV), and actual cost (AC) for
LED Screen for Advert B. Explain your results.
2. Determine the schedule variance (SV), cost variance (CV), schedule
performance index (SPI), and cost performance index (CPI) for the production
of LED Screen for Advert B. Explain your results

3. Use SPI to estimate the completion time and how much longer it will take to finish this
project. (budgeted time / SPI)
QUESTION 2

Assume you have to complete project ABC within 6 months. Given the following information
as part of the payment received for one particular phase of a project ABC.

a) Perform the following and explain your results.

i. Cost Variance (CV)

ii. Schedule Variance (SV)

iii. Cost Performance Index (CPI)

iv. Schedule Performance Index (SPI)

v. Use the schedule performance index (SPI) to estimate the completion time and how
much longer it will take to finish this project.
QUESTION 3

Given the following information on work break down structure project progress. Calculate
the earned value of each task and total.

Task Duration % task Rate Earned Value


completed (per week)
Identify 10 weeks 60 RM1200.00
Requirement
System 3 weeks 9 RM300.00
Design
Prototype 12 weeks 0 RM400.00
development
System 3 weeks 100 RM1000.00
Testing

Total Earned Value

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