MGMT8400 C8 Earned Value Exercise

Exercise 1

Using the following data, calculate the planned and actual monthly budgets through the end of
June. Assume the project is planned for 12-month duration and a $250 000 budget.

Activity Jan Feb Ma Apr May Jun Plan % Calc.

r Complete Value*
Staffing 8 7 15 100 15
Blueprinting 4 6 10 100 10
Prototype 2 8 10 70 7
Development
Full Design 3 8 10 21 67 14.07
Construction 2 30 32 25 8
Transfer 10 10 0 0
Monthly Plan 8 11 8 11 10 50 54.07
Cumulative 8 19 27 38 48 95
Monthly Actual 10 15 6 14 9 40
Cumulative Actual 10 25 31 45 54 94
*Calc. Value = product of ‘Plan’ and ‘% Complete’ (e.g. for Staffing, 15 x 1 = 15)

Using the data from the above table, calculate the following values:

Schedule Variances
Planned Value (PV) 98
Earned Value (EV) 54.07
Schedule Performance Index Earned value/planned
(SPI) value = 54.07/98= 0.55
Planned Time to Completion 12 months
SPI= 0.55
Duration/SPI = 12/0.55=
21.8 months

Cost Variances
Actual Cost of Work Performed $94
(AC)
Earned Value (EV) $54
Cost Performance Index (CPI) Earned value/planned
value
 54/94 =0.57
Estimated Cost to Completion 250000/0.57=
$438596.49

Exercise 2

You are calculating the estimated time to completion for a project of 1-year duration and a
budgeted cost of $500 000. Assuming the following information, calculate the Schedule
Performance Index (SPI) and the estimated time to completion.

Schedule Variances
Planned Value (PV) 65
Earned Value (EV) 58
Schedule Performance Index EV/PV = 58/65= 0.89
(SPI)
Planned Time to Completion 12 months
SPI =0.89
Duration/SPI = 12/0.89
=13.48 months

Exercise 3

Assume you have collected the following data for your project. Its budget is $75 000, and it’s
expected to last 4 months. After 2 months, you have calculated the following information
about the project:

PV = $45 000

EV = $38 500

AC = $37 000

Calculate SPI and CPI. Based on these values, estimate the time and budget necessary to
complete the project. How would you evaluate these findings? Are they good news or bad
news?
SPI = 38500/45000= 0.85
CPI= 38500/37000= 1.04
Estimate cost at completion = 75000/1.04 = $72115.38
Estimated time = 4/0.8 = 4.7 month

It is both a good and bad news. The SPI and CPI should be greater than 1, but SPI is less than 1
so it is a bad news considering the SPI.