Given the following information for a one-year project, answer the following que

Question

Given the following information for a one-year project, answer the following questions.

Planned Value (PV) = $30,000

Earned Value (EV) = $27,000

Actual Cost (AC) = $25,000

Budget at Completion (BAC) = $150,000

What is the cost variance, schedule variance, cost performance index, and schedule performance index for the project?

Is the project ahead of schedule or behind schedule?

Is the project under budget or over budget?

Use the cost performance index to calculate the estimate at completion (EAC) for this project. Is the project performing better or worse than planned?

Use the schedule performance index to estimate how long it will take to finish this project.

Explanation / Answer

Cost Variance (CV) = Earned Value (EV) – Actual Cost (AC) = $(27000 - 25000) = $2000
Schedule Variance (SV) = Earned Value (EV) – Planned Value (PV) = $(27,000 - 30,000) = - $3,000

Cost Performance Index = Earned Value (EV) / Actual Cost (AC) = 27,000 / 25,000 = 1.08
Schedule Performance Index = Earned Value (EV) / Planned Value (PV) = 27,000 / 30,000 = 0.9

Project is behind the schedule. As SV is negative.

Project is underbudget. As CPI is > 1.

EAC = BAC/CPI = $150000 / 1.08 = $ 138889

You are 10% behind schedule using SPI.

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