PMAN 650 Session 5 Individual Assignment Earned

PMAN 650
Session 5 Individual Assignment
Earned Value
Introduction
All of you have had at least an introduction to earned value management in the project
management fundamentals course. Many of you may have had the opportunity to use earned
value management in your professional careers. In practice, most EVM analysis results are
generated by scheduling software or other applications. As a project manager, you must have a
good handle on the concepts and be able to verify the accuracy of EVM analysis results.
In this assignment, you will have an opportunity to brush up and expand upon your EVM
knowledge and skills by applying EVM concepts to a practical problem. THIS ASSIGNMENT
REQUIRES A MANUAL ANALYSIS - DO NOT USE MICROSOFT PROJECT.
Problem Background
Your project consists of six activities shown in the table below, along with: (1) planned start and
finish dates; (2) activity budgets; and (3) earned value (EV) accrual rules from you project cost
management plan.
Activity

Planned Start

Planned Finish

Budget

Activity One

Mon - 10/13/14

Fri - 10/31/14

10,000

Activity Two

Mon - 10/20/14

Fri -11/28/14

30,000

Activity Three

Mon -11/3/14

Fri -11/14/14

7,000

Activity Four

Mon -10/13/14

Fri -11/14/14

20,000

Activity Five

Mon 11/17/14

Fri - 12/5/14

10,000

Activity Six

Mon -12/8/14

Fri -12/19/14

7,000

EV Accrual
Rule
Percent
Complete with
Gates
Fixed Formula
-50/50
Fixed Formula
-20/80
Weighted
Milestones
Fixed Formula
0/100
Fixed Formula
0/100

Activity Two has a start-to-start relationship (one week lag time) with Activity One. Activity Three
has a finish-to-start relationship with Activity One. Activity Five has finish-to-start relationships
with activities Three and Four. Activity Six has finish-to-start relationships with activities Two and
Five.
Assumptions
1. Assume a five-day work week.
2. For all activities (except Activity Four), assume the expenditure rate is constant over the
duration of the activity, i.e.:

PMAN 650
Session 5 Individual Assignment
Earned Value

Expenditures

Time

For Activity Four, assume the expenditure profile shown below:

5.5K
Expenditures
3.0K

1

2

4

3

5

Weeks

The project sponsor wants you (the PM) to present a project cost and schedule performance
assessment using data through Friday, Nov 7, 2014. You have collected the following
information:

Activity
Activity One
Activity Two
Activity Three

Actual Start
Mon - 10/13/14
Mon - 10/20/14
Mon -11/4/14

Actual Finish
Fri - 11/3/14

Actual Cost
12,000
12,000
4,000

PMAN 650
Session 5 Individual Assignment
Earned Value
Activity Four
Activity Five
Activity Six

Mon -10/13/14

20,000
0
0

For Activity One, three equally-valued gates have been established and all gates are complete
as of 11/7/14.
For Activity Four, four milestones have been established with the following values: (1) milestone
1 30%; milestone 2- 30%; milestone 3 10%; milestone 4 -30%. Three of the milestones are
complete as of 11/7/14.

Show all work. Round dollar values to the nearest dollar. Calculate all
other variables to three decimal places.
1. Earned Value Measures

a. Calculate earned value measures for each activity and for the cumulative project
as of 11/7/14; fill in the table below:

Activity

Planned Value
(PV)

Earned Value (EV)

Actual Cost (AC)

Activity One
Activity Two
Activity Three
Activity Four
Activity Five
Activity Six
Entire Project

12,000
12,000
4,000
20,000
0
0

2. Earned Value Performance Measures

a. Calculate earned value performance parameters for each activity and for the
cumulative project as of 11/7/14; fill in the table below:
Activity

Activity One
Activity Two

Schedule
Variance (SV)

Schedule
Performance
Index (SPI)

Cost Variance
(CV)

Cost
Performanc
e Index
(CPI)

PMAN 650
Session 5 Individual Assignment
Earned Value
Activity Three
Activity Four
Activity Five
Activity Six
Entire Project

b. Is the project ahead of schedule, on schedule, or behind schedule? What
information are you using to make this assessment and why?
c. Is the project over budget, under budget, or on budget? What information are you
using to make this assessment and why?

3. Earned Value Forecasts
a. Calculate the range (low/most-likely/high) of possible Estimates-at-Completion
(EAC).
b. Using the low EAC, what is the Estimate-to-Complete (ETC)?
c. Using the high EAC, how much more or less money (other than the current
budgeted amount) will you need to finish the project?
d. How much would the Cost Performance Index (CPI) have to change in order to
complete the project within the original budget?