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Week 3 Hand-in Assignment As a project manager for this management consulting project, with the WBS already had

been developed and the activities with related resources been assigned. By Using an excel table I've already developed the budget for this project by allocating cost over actual work time and the calendar time line. The Estimated budget for this project is 128,000 with a 64 day duration schedule. Projected cash flow allocates actual resource expenses over the progression of the project to control the actual daily planned expense. 1-The below table was the initial budget estimation
WBS 1.1 Tasks Final proposal and contract documentation Duration 4 Days Resource Type Junior Consultant Legal Consultant 1.2 Assignment kickoff workshop 2 Days Vice President Junior Consultant Senior Consultant Vice President Product Expert Junior Consultant Senior Consultant Junior Consultant Intern Senior Consultant Junior Consultant Senior Consultant 2.4 Market research 1 32 Days Vice President Junior Consultant Senior Consultant 2 Interns* Junior Consultant Senior Consultant 2 Interns* Junior Consultant Senior Consultant 2 Interns* Vice President Senior Consultant Junior Consultant Vice President Senior Consultant Junior Consultant Vice President Total Duration 64 days Effort in Days 4 1 1 2 1 1 1 5 2 3 10 2 2 1 1 20 2 28 20 2 28 5 3 5 0.5 3 3 0.5 1 1 0.5 Rate Per Day $750 $1,500 $3,500 $750 $1,500 $3,500 $3,500 $750 $1,500 $750 $250 $1,500 $750 $1,500 $3,500 $750 $1,500 $500 $750 $1,500 $500 $750 $1,500 $500 $3,500 $1,500 $750 $3,500 $1,500 $750 $3,500 Total budget Total cost $3,000 $1,500 $3,500 $1,500 $1,500 $3,500 $3,500 $3,750 $3,000 $2,250 $2,500 $3,000 $1,500 $1,500 $3,500 $15,000 $3,000 $14,000 $15,000 $3,000 $14,000 $3,750 $4,500 $2,500 $1,750 $4,500 $2,250 $1,750 $1,500 $750 $1,750 $128,000

2.1

Designing market research

5 Days

2.2

Pilot run of market research

10 Days

2.3

Final market research design and signoff

2 Days

2.5

Market research 2

32 Days

2.6

Data collation and analysis

5 Days

3.1

Final report preparation

3 Days

3.2

Presentation to client

1 Day

2-below is the graph for the time line of the project and the planned money to be spent on the project on daily biases as per excel table I made.

In order to check if our project is healthy or not with the above assumptions we should measure the efficiency of time utilized on the project by what called (SPI) Schedule Performance Index and by (CPI) cost performance index if we need to measure the efficiency of cost utilized on the project. (SPI)It is a measure of progress achieved compared to the planned progress. SPI = EV/PV after calculation we need to consider that if SPI more than one means that more work has been done than planned and if it is less than one means less work has been done than planned and if it is equal to one means that achieved work is equal to the planned work. (PMBOK 2008 p.183) (CPI) it is the measure of the value of work done compared to the actual money spent on the project. CPI=EV/AC after calculation we need to consider that if CPI is less than one.it means that we are earning less than the money we are spending, and if it is more than one it means that we are earning more than the money we are spending and if it is equal it means that earning and spending the same. (PMBOK 2008 p.183) In order to calculate the SPI we need to know what are the EV and the PV: Earned Value (EV): is the actual work completed till date; i.e. the value of the project that you achieved so far. As per the PMBOK Guide Earned Value (EV)is the value of work performed expressed in terms of the approved budget assigned to that work for an activity or WBS component. (PMBOK 2008 p.182) And the Planned Value (PV): is the planned value of work to be achieved in a certain period of time; i.e. it is the money that you should spend as per the project schedule. As per the PMBOK Guide Planned Value (PV) is the authorized budget assigned to work to be accomplished for an activity or WBS component (PMBOK 2008 p.182)

Actual Cost (AC): is the total cost been spent for actual work completed so far; i.e. it is the amount of money spent till date. As per the PMBOK Guide Actual Cost (AC) is the total cost actually incurred in accomplishing work performed for an activity or WBS component (PMBOK 2008 p.182)

So if we assume that we are in the end of Day 25 of the project, the company has already spent $48,000, and the project has delivered 5% more than planned at the end of Day 25. In the assumption of distributing the project budget 128000$ equally on a daily basis means that you will be spending a $2000 every day so the planned value up to day 25 is PV=25*$2000=$50000 and to calculate the earned value I need to figure out how much percentage needed to be performed every day which is 1.6% in order to figure out how much 5% of work worth which is equals to three days' work so EV=$50000+$6000=$56000 and then the AC=$48,000. SPI = EV/PV=56000/50000=1.12 means that more work has been done than planned CPI=EV/AC=56000/48000=1.17 means that we are earning more than the money we are spending As explained if the index in both more than one it means that we are in a very good shape and ahead of plan and in order to continue like that critical path needs to be monitored closely up to the project end

Reference 1. https://my.ohecampus.com/seip-server/home?locale=en_us (accessed on 23-Dec-2012) 2. PMBOK English 4th Edition published by PMI 2008.

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