CHAPTER 5 Estimating Project Times and Costs

Ex.5.1 Hourly Rate $40/hr

Hours needed 80
Overhead Rate 40%
Direct Cost of Labor =80 hrs. x $40/hr
$ 3,200
Overhead @ 40% of Direct Labour 1,280
Total Cost = Direct + Overheads
$ 4,480

Ex.5.2 Size of the house 2900 sq.ft.

Ave. Price for Lot and house $120 per sq.ft.
a. Estimated cost for the house = Area x Rate
$ 348,000

b. Cost when own services are used: $

Plumbing roughed in 6% 20,880
Plumbing fixtures installed 4% 13,920
Interior decorating 4% 13,920
Total saving / reduction 48,720

Net Estimated cost for the house 299,280

Ex.5.3 a. Total Project Cost $600,000

a. Design? 40% 240000
b. Programming? 20% $120,000
c. In-house testing? 40% $240,000

Ex.5.3 b. a. Requires good, realistic historical data.

b. If total cost estimate is off, all other costs will be off.
c. Project must be very similar to past projects for subdeliverables to be useful.
Inputs 10% 24000
Outputs 10% 24000
Files 10% 24000
Interfaces 20% 48000
Programming 50% 120000
100% 240000
 CHAPTER 6 Developing a Project Plan

Ex.6.3 Activity C is a burst activity. Activity G is a merge activity.

Ex.6.8 We would expect to penalized for one day past the 15 day deadline.
Ex.6.12 The project is expected to take 18 days. The project is not very sensitive with one dominant critical path.
Activities B, D, E, G, H and J all have total slack of 9. Activities B, D, E, and G have zero free slack. Activ
e dominant critical path.
ave zero free slack. Activities H and J have 9 days of free slack.
 CHAPTER 8 Scheduling Resources & Costs

Ex.8.1

Ex.8.2
Resource constraints extend the project duration from 12 days to 14 days and Activity 2
which was part of the original critical path is no longer critical path. All other activities are
critical which illustrates the key point that resource constraints tend to increase the
sensitivity of project networks.
ays and Activity 2
other activities are
o increase the
 CHAPTER 9 Reducing Project Duration

Example from Text Book: p.no.486-488

Method: Least-cost method
Objective: Reduce the project duration to 21 time units.

Stage Paths Duration Duration $

Initial A-B-E-G 3+6+8+6 23

A-C-F-G 3+10+5+6 24
CP A-D-F-G 3+11+5+6 25
Cost 450

2 Reduce activity A one time unit (from CP, and least cost activity)
A-B-E-G 2+6+8+6 22
A-C-F-G 2+10+5+6 23
CP A-D-F-G 2+11+5+6 24
Cost 470

3 Reduce activity D one time unit (from CP, and least cost activity)
A-B-E-G 2+6+8+6 22
CP A-C-F-G 2+10+5+6 23
CP A-D-F-G 2+10+5+6 23
Cost 495

4 Reduce activity F one time unit (from CP, and least cost activity)
CP A-B-E-G 2+6+8+6 22
CP A-C-F-G 2+10+4+6 22
CP A-D-F-G 2+10+4+6 22
Cost 525

5 Reduce activity C, D, E one time unit (from CP, from each path)
CP A-B-E-G 2+6+7+6 21
CP A-C-F-G 2+9+4+6 21
CP A-D-F-G 2+9+4+6 21
Cost 610

Ex.9.2
 CHAPTER 13 Progress and Performance Measurement and Evaluation

Ex.13.1
CV = EV – AC = 2,100 – 2,000 = 100
SV = EV – PV = 2,100 – 2,400 = -300

Ex.13.2
CV = EV – AC = 600 – 650 = -50
SV = EV – PV = 600 – 560 = 40
CPI = EV / AC = 600 / 650 = 0.92 Over Cost
Ahead of
SPI = EV / PV = 600 / 560 = 1.07
Schedule

Ex.13.3

End of Period 4
Actual % EV AC PV CV SV
Task
Complete $ $ $ $ $
A Finished 400 300 400 100 0
B 50% 1200 1000 800 200 400
C 33% 500 500 600 0 -100
D 0% 0 0 0 0 0
E 0% 0 0 0 0 0
Cumulative Totals $2100 $1800 $1800 $+300 $+300

End of Period 8 (Option 1)

Actual % EV AC PV CV SV
Task
Complete $ $ $ $ $
A Finished 400 300 400 100 0
B Finished 2400 2200 2400 200 0
C Finished 1500 1500 1500 0 0
D 0% 0 300 0 -300 0 D has not started
E 33% 300 300 300 0 0
F 0% 0 0 0 0 0
Cumulative Totals $4600 $4600 $4600 $0 $0

End of Period 8 (Option 2 - as per book)

Actual % EV AC PV CV SV
Task
Complete $ $ $ $ $
A Finished 400 300 400 100 0
B Finished 2400 2200 2400 200 0
C Finished 1500 1500 1500 0 0
D 25% 400 300 0 100 400 D is 25% complete
E 33% 300 300 300 0 0
F 0% 0 0 0 0 0
Cumulative Totals $5000 $4600 $4600 $400 $400

The project appears to be doing nicely. In both periods 4 and 8 the cost variance is positive—+$300 and

The schedule variance is also positive—+$300 and +$400 for period 4 and period 8. Since Task D is al

Note: Completion of the answer sheet requires constant reference to the baseline figure.
s not started

25% complete

e is positive—+$300 and +$400, respectively. This suggests a pattern of good cost variance that is under budget.

od 8. Since Task D is already 25% complete, Task B must have been completed at least one period early.
under budget.