PMGT501; WBS 6.

4
Project Control
David Bolton

WBS 6.4.1: Solve Problem #3 found on page 467 of the Meredith and Mantel text.
A software development project at day 70 exhibits an actual cost of $78,000 and a
scheduled cost of $84,000. The software manager estimates a value completed of
$81,000. What are the cost and schedule variances and CSI? Estimate the time
variance.

AC = $78,000
PV = $84,000
EV = $81,000
AT = 70 days
Cost Variance = EV AC = $81000 - $78000
Cost Variance = $3,000
Schedule Variance = EV PV = $81,000 - $84,000
Schedule Variance = -$3000
CPI = EV/AC = 1.03
SPI = EV/PV = 0.96
Cost Schedule Index = EV2/(AC)(PV) = ($81,000)2/($78,000)($84,000)
Cost Schedule Index = 6,561,000,000 / 6,552,000,000
Cost Schedule Index = 1.001
Time Variance = ST AT = (AT)(CSI) AT = (70)(1.001) 70
Time Variance = 0.07 days
This is good. The project is a little under budget (CPI = 1.03) and a little behind
schedule (SPI = 0.96). In theory, the PM could spend a little extra and make up that
minor schedule variance. In our PM shop, CPI and SPI between 0.95 and 1.05 is
green so theres no problem here.

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PMGT501; WBS 6.4

Project Control
David Bolton

WBS 6.4.2: Solve problem #4 found on page 467 of the Meredith and Mantel text.
A project to develop a county park has an actual cost in month 17 of $350,000, a
planned cost of $475,000 and a value completed of $300,000. Find the cost and
schedule variances and the three indices.
AC = $350,000
PV = $475,000
EV = $300,000
AT = 17 months
Cost Variance = EV AC = $300,000 - $350,000
Cost Variance = -$50,000
Schedule Variance = EV PV = $300,000 - $475,000
Schedule Variance = -$175,000
Cost Performance Index = EV/AC = $300,000/$350,000 = 0.857
Schedule Performance Index = EV/PV = $300,000/$475,000 = 0.632
Cost Schedule Index = (CPI)(SPI) = 0.857 * 0.632
Cost Schedule Index = 0.542
This is bad. The project has spent more than scheduled and is still far behind where it
should be. CPI is yellow and SPI is red. Expect to be on the Directors radar with
performance like this.

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PMGT501; WBS 6.4

Project Control
David Bolton

WBS 6.4.3: Solve problem #5 found on page 467 of the Meredith and Mantel text.
A consulting project has an actual cost in month 10 of $23,000, a scheduled cost of
$17,000 and a value completed of $20,000. Find schedule and cost variances and the
three indices.

AC = $23,000
PV = $17,000
EV = $20,000
AT = 10 months
Cost Variance = EV AC = $20,000 - $23,000
Cost Variance = -$3,000
Schedule Variance = EV PV = $20,000 - $17,000
Schedule Variance = $3,000
Cost Performance Index = EV/AC = $20,000/$23,000 = 0.87
Schedule Performance Index = EV/PV = $20,000/$17,000 = 1.18
Cost Schedule Index = (CPI)(SPI) = 0.87 * 1.18
Cost Schedule Index = 1.027
This one is a mixed bag. The PM has overspent (CPI=.87) and is over his earned value
projection but is way ahead of schedule (SPI =1.18).

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PMGT501; WBS 6.4

Project Control
David Bolton

WBS 6.4.4: Solve problem #13 found on page 468 of the text.
The following project is at the end of its sixth week. Find cost and schedule variances
and the CPI, SPI, ETC and EAC.
First, the activity chart:

Activity Predecessor Duration

Budget
($)

Actual Cost
($)

%
Complete

300

400

100.00%

200

180

100.00%

250

300

100.00%

600

400

20.00%

b, c

400

200

20.00%

Page 4

BAC :

1750

PMGT501; WBS 6.4

Project Control
David Bolton

Then the Plan Chart showing 50/50 EV reporting for the tasks.
Plan!
Activity

Week:
1

150

150

100

100

125

300

125

200

PV

250

150

525

125

200

Cum
PV

250

400

925

1050

1250

1250

EV

250

150

286

125

40

Cum EV

250

400

686

811

851

851

Actual
Cost

400

180

300

600

Cum
A/C

400

580

880

880

1480

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PMGT501; WBS 6.4

Project Control
David Bolton

Finally, the analysis:

Plan!
Activity

Week:
1

CV

250

106

-69

-29

-629

SV

-239

-239

-399

-399

CPI

1.000

1.183

0.922

0.967

0.575

SPI

1.000

1.000

0.742

0.772

0.681

0.681

ETC

1750

1350

899.59184

1018.890259

929.6357227 1563.478

EAC

1750

950

319.59184

138.8902589

49.63572268 83.47826

The project appears to be going OK during the first two weeks. Problems surface in the
third week when task D reports 50% of the planned $600 task value but only completes
20% of the work. The problem worsens in week 5 when task E starts and also reports
50% of task value but only completes 20% of the work.

I think the critical input method of EV reporting might give a more accurate picture of the
project status but it is still going to show the obvious: The project is slipping schedule
(decreasing SPI) and overrunning budget (decreasing CPI, increasing ETC). Notice
EAC in week 6 is $83 and there are still two weeks to go in the program. Not good.

Page 6