Practical 4 Assume that you have completed three months of a project. The Budget at Completion (BAC)...

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Practical 4
Assume that you have completed three months of a project. The Budget at Completion (BAC) was $200,000 for this six-month project. Given the following information for the project, answer the questions (a) to (d)
You can also make the following assumptions:
Planned value (PV) is $120,000,
Earned Value (EV) is $100,000, Actual Cost (AC) is $95,000.
Answer the following Questions:
a) What is the Cost Variance (CV), Schedule Variance (SV), Cost performance Index (CPI) and Schedule Performance Index (SPI) for the project?
) How do you assess the progress on the project? Is it under budget or over budget? Is it ahead of schedule or behind schedule?
c) Use the CPI to calculate the Estimate at Completion (EAC) for the project. Is the project performing better or worse than planned?
d) Use the SPI to estimate how long it will take to finish this project.
e) Why would Business Process Reengineering (BPR) be required after ERP implementation? (200 words).
f) Compare and contrast two leading Supply Chain Management Systems.

practical-4-1jsnhjc5.docx

Hari Kiran · Accepted Answer

Sheet1
	(a)
		Cost Variance                                        =	Earned Value (EV) - Actual Cost
			 $ 100000 - $ 95000
			$   5,000
		Cost Variance is the difference between the actual cost and the budgeted cost. This formula is figure out that actual cost spent is over or under budget.  
		In the given case  it is under budget.
		Scheduled Variance                            =	Earned Value (EV) - Planned Value (PV)
			$ 100000 - $ 120000
			$   -20,000
		Schedule Variance indicates how much a project is ahead or behind schedule. 
		In the given case we found a negative schedule variance which means less work is complete than planned, so your project is behind schedule. 
		Cost performance Index (CPI)          =	Earned Value (EV) / Actual Cost
			$ 100000 / $ 95000
			1.05
		CPI ratio with a value higher than 1 indicates that a project is performing well budget-wise. In the given case CPI is 1.05 it means project is performing well.
		Scheduled Performance Index (SPI) =	Earned Value (EV) / Planned Value (EV)
		 	100000/120000
			0.83
		SPI shows how you are progressing compared to the planned project schedule. 
		In the given project 83% progressing compared to the planned project schedule. The project is behind schedule.
	(b)	There are  6 methods to assess progress of project : 
		1. Units Completed
		2.Incremental Milestones
		3. Start / Finish
		4.Cost Ratio
		5.Experience / Opinion
		6. Weighted or Equivalent Units
		The project is under budget by $ 5000. 
		The project is behind Schedule by - $ 20,000. 
	(C) 	Estimate at Completion (EAC)            =	Budget at Completion  (BAC) / Cost performance Index (CPI)
			200000 / 1.05
			$   190,476.19
		Estimate at Completion (EAC) forecasts the project budget while the project is in progress.
														49.8
	(d) 	The SPI is 0.83  this means that for every estimated hour of work, the project team is only completing 0.83 hours i.e49.8 miutes (60*0.

Practical 4 Assume that you have completed three months of a project. The Budget at Completion (BAC) was $200,000 for this six-month project. Given the following information for the project, answer...

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