Project Management

Chapter 7–HW: Q12:

1. Refer to the table below. What is the cumulative budgeted cost at the end of week 6?  

CBC is $100,000 at the end of week 6

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1. Below is a table of actual costs. What is the cumulative actual cost at the end of week 6? Determine whether there is a cost overrun or under run. What is causing it?

CAC at the end of week 6 is $112,000.  There is a cost over run for $12,000. Reason is, Task 1 for $34,000 when only $30,000 was budgeted. The actual cost for Task 2 was $68,000 when it was budgeted for $60,000 up to week 6. Task 3 actual cost was $10,000–which equals its budgeted amount at week 6.

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1. Below is a table of the cumulative percentages of work completed by the end of week 6. What is the cumulative earned value of the project at the end of week 6? Is it good?
   
   The CEV of the project by end of week 6 is 83.5 Therefore, with the given calculations the actual cost it is not good because it indicates that the actual cost is exceeding the budgeted cost. Aggravating the situation further is the fact that the value of the work performed is not keeping up the actual cost.

Task 1:  .30 x 100% = 30  

Task 2:  .70 x 65% = 45.5

Task 3:  .40 x 20% = 8  

Total CEV  = 83.5

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1. What is the CPI at the end of week 6? What is the CV?
   

CPI= CEV/CAC

CPI= $83,500/$112,000
= 0.745

Therefore the CPI is $0.745. Meaning for every $1. Actual expended, only $0.745 of value was accomplished.

CV= CEV-CAC 
CV= $83,500 – $112,00
= -$28,500

This indicates that the value of work performed through week 6 is $28,500 less than the amount actually expended