Your project to obtain charitable donations is now 30 days into a planned 40-day
ID: 425432 • Letter: Y
Question
Your project to obtain charitable donations is now 30 days into a planned 40-day project. The project is divided into 3 activities. The first activity is designed to solicit individual donations. It is scheduled to run the first 25 days of the project and to bring in $25,000. Even though we are 30 days into the project, we still see that we have only 90 percent of this activity complete. The second activity relates to company donations and is scheduled to run for 30 days starting on day 5 and extending through day 35. We estimate that even though we should have approximately 83 percent (or more precisely 25/30) of this activity complete, it is actually only 50 percent complete. This part of the project was scheduled to bring in $150,000 in donations. The final activity is for matching funds. This activity is scheduled to run the last 10 days of the project and has not started. It is scheduled to bring in an additional $50,000. So far $175,000 has actually been brought in on the project. Calculate the schedule variance, schedule performance index, cost (actually value in this case) variance, and cost performance index. (Negative values should be indicated by a minus sign. Do not round your intermediate calculations or "variance" values. Round your "performance index" values to 3 decimal places.) Schedule variance Schedule performance index Cost variance Cost performance indexExplanation / Answer
The Schedule Variance is a variance between earned value of a project and planned value of a project based on the schedule performance of a project. It can be calculated with the help of following formula.
Schedule Variance (SV) = Earned Value (EV) - Planned Value (PV)
Where,
Earned Value (EV) is valued earned to the proportion of the completion of the task at point of time
Planned Value (PV) is the value which was supposed to earn at that point of time
Planned value (PV) calculation:
Activity 1: 100% * $25,000 = $25,000
Activity 2: 83.33% * $150,000 = $125,000
Activity 3: 0% * $50,000 = $0
Total Planned value (PV) =$25,000 + $125,000 +$0 = $150,000
Earned value (EV) calculation:
Activity 1: 90% * $25,000 = $22,500
Activity 2: 50% * $150,000 = $75,000
Activity 3: 0% * $50,000 = $0
Total Earned value (EV) =$22,500 + $75,000 +$0 = $97,500
Therefore
Schedule variance (SV) = EV – PV = $97,500 -$150,000 = -$52,500
Schedule performance index (SPI) = EV/PV = $97,500/$150,000 = 0.65
Cost variance (CV) = EV – AC
Where EV is earned value = $97,500 (calculated above)
And AC is the actual cost of project = $175,000
Therefore
Cost variance (CV) = EV – AC = $97,500 -$175,000 = -$77,500
Cost performance index (CPI) = EV/AC =$97,500/$175,000 = 0.557
Therefore,
Schedule variance
-$52,500
Schedule performance index
0.650
Cost variance
-$77,500
Cost performance index
0.557
Schedule variance
-$52,500
Schedule performance index
0.650
Cost variance
-$77,500
Cost performance index
0.557
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