3. Assume that you have completed three months of the project. The BAC was $120,

Question

3. Assume that you have completed three months of the project. The BAC was $120,000 for this six-month project. You can also make the following assumptions: PV S60,000 EV $55,000 AC $50,000 What is the cost variance, schedule variance, cost performance index (CPI), and schedule performance index (SPl) for the project? How is the project doing? Is it ahead of schedule or behind schedule? Is it under budget or over budget? Use the CPI to calculate the estimate at completion (EAC) for this project. Is the project performing better or worse than planned? a. b. c. d. Use the SPI to estimate how long it will take to finish this project Sketch an earned value char using the information from your answers to parts a through d. Use Figure 7-5 as a guide. e.

Explanation / Answer

A) Cost Variance
CV = EV – AC =55000-50000=$5000


Schedule Variance
SV = EV-PV =55000- 60000=-$5000


Cost Performance Index
CPI = EV / AC =55,000/50,000=1.1


Schedule Performance Index
SPI = EV / PV=55000/60000=0.92


B) The project cost is $50000 under budget but $5000behind schedule

C)Estimate at Completion (EAC)
Estimate To Complete (ETC) = (BAC - EV) / CPI
=(120000 – 55000)/1.1 = $59,090.91

EAC = AC + ETC =50000+59090.91 =$109090.9




* Budget variance = BAC - EAC = 120,000 - 109090.9= $10909.1

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