A project to build a new bridge seems to be going very well since the project is

Question

A project to build a new bridge seems to be going very well since the project is well ahead of schedule and costs seem to be running very low. A major milestone has been reached where the first two activities have been totally completed and the third activity is 70% complete. The planners were only expecting to be 57% through the third activity at this time. The first activity involves prepping the site for the bridge. It was expected that this would cost $1,426,000 and it was done for only $1,306,000. The second activity was the pouring of concrete for the bridge. This was expected to cost $10,506,000 but was actually done for $9,006,000. The third and final activity is the actual construction of the bridge superstructure. This was expected to cost a total of $8,506,000. To date they have spent $5,006,000 on the superstructure.

Calculate the schedule variance, schedule performance index, and cost performance index for the project to date. (Round your "performance index" values to 3 decimal places.)

A project to build a new bridge seems to be going very well since the project is well ahead of schedule and costs seem to be running very low. A major milestone has been reached where the first two activities have been totally completed and the third activity is 70% complete. The planners were only expecting to be 57% through the third activity at this time. The first activity involves prepping the site for the bridge. It was expected that this would cost $1,426,000 and it was done for only $1,306,000. The second activity was the pouring of concrete for the bridge. This was expected to cost $10,506,000 but was actually done for $9,006,000. The third and final activity is the actual construction of the bridge superstructure. This was expected to cost a total of $8,506,000. To date they have spent $5,006,000 on the superstructure.

Explanation / Answer

Schedule variance =BCWP - BCWS

BCWP = Budgeted Cost of Work Performed, also known as the Earned Value (EV)

BCWS = Budgeted Cost of Work Scheduled, also known as the Planned Value (PV)

Cost performance index = BCWP/ACWP

ACWP = Actual Cost of Work Performed, i.e. the actual cost

Schedule performance index = BCWP/BCWS

Given data

BCWS (or) PV:

Prepping the site 100% of $14,26,000 = $14,26,000

Pouring of concreate 100% of $10,506,000 = $10,506,000

Construction 57% of $8,506,000 = $48,484,20

Total =  $14,26,000 + $10,506,000 + $48,484,20 = $16,780,420

BCWP or EV :

Prepping the site 100% of $14,26,000 = $14,26,000

Pouring of concreate 100% of $10,506,000 = $10,506,000

Construction 75% of $8,506,000 = $6,379,500

BCWP(Total) = $14,26,000 + $10,506,000 + $6,379,500 = $ 18,311,500

ACWP = Actual Cost of Work Performed = $15,318,000

Schedule variance =BCWP - BCWS = $ 18,311,500 - $16,780,420 = $1531080

Schedule performance index = BCWP/BCWS = $ 18,311,500 /$16,780,420 = 1.09

Cost performance index = BCWP/ACWP = $ 18,311,500/ $15,318,000 = 1.20

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