Geoff coolly surveyed his earned value table at the conclusion of month 24. It was hard to believe that two short years ago, with his membership at Match
com about to expire, he had managed to craft an ad that was both urbane and manly enough as to catch the eye of the divine Miss Smylie. (The male model photo he substituted for his own certainly didn't hurt either.) Now he was almost done managing this critical project. Some might think him crass for taking such an approach, but he practiced what he preached at the small commuter school where he taught. Calculate all of the schedule and cost variances (costs in the table are in dollars) for this project and comment on Geoff's skills as a project manager.
Activity 4 8 12 16 20 24 28 Total % Complete
Courtship 1000 2000 3000 3000 3000 1000 13000 90%
Proposal 500 5000 0 0 5000 10500 100%
Negotiations 500 0 1000 1500 100%
Invitations 800 800 100%
Showers 400 800 800 2000 100%
Musicians 400 1000 1400 20%
Caterer 200 2000 5000 7200 30%
Rehearsal 400 4000 4400 10%
Party 1000 2000 3000 20%
Ceremony 500 500 500 500 3500 5500 20%
Reception 1000 1000 6000 8000 30%
Honeymoon 2000 4000 6000 40%
Total 1000 3000 10700 5900 9700 7500 25500 63300
Cumulative 1000 4000 14700 20600 30300 37800 63300
Actual 2500 5100 12700 6400 10600 9000 0
Cumulative Actual 2500 7600 20300 26700 37300 46300
The schedule variances for this earned value management table are as follows:
Planned value (PV) is $37,800 from the table.
Earned value (EV) is the sum of the products of the activity total costs times their percentage complete.
EV = × 1000
EV = $35,880
Schedule Performance Index: EV/PV = 35,880/37,800 = 0.949
Estimated Time to Completion: (1/SPI) Planned Time = (1/.949 )28 = 29.498 months
The cost variances for the EVM table are:
Actual cost of work performed (AC): $46,300 (from table)
Earned value (EV): $35,880 (calculated above)
Cost performance index (CPI): EV/AC=35,880/46,300 = 0.775
Estimated cost to completion: (1/CPI) Plan Budget = (1/0.775 ) ∗ 63,300 = $81,683
Geoff's skills as a project manager are a cause for concern; instead of bringing the project in for $63,300 and in 28 months, he stands to spend an extra $18,383 and not complete the project by the 28th month, extending past this deadline an extra 6 weeks. EVM isn't everything though; what's an extra $18 grand and 6 weeks when you've found your soul mate?
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