EM612 Project Management of Complex Systems

VERSION 2017.03.11
Read First:
FOR ALL EXAMPLES:
You MUST Calculate CV, CPI, SV, SPI, ETC & EAC
Print this document and show work below.

All submissions must be hand written and scanned into PDF format and uploaded. Other formats
will require a resubmission and deduction for not following instructions.
If your work is found to be in violation of the Stevens Honor Policy, it will be referred to the
Academic office.

Homework I Earned Value

1. Assume that operations on a work package were expected to cost $1500 to complete
the package. They were originally scheduled to have been finished today. At this point,
however, we have actually expended $1350, and we estimate that we have completed
two-thirds of the work.

What are the Cost and Schedule variances?

Calculate CPI, SPI, ETC & EAC. Interpret the results (what does it all mean).

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2. Find the schedule and cost variances for a project that has as actual cost at month 16
of $540,000, a scheduled cost of $523,000, and an earned value of $535,000.

Show Calculations and recommendation (not just good, bad or ok/neutral)

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3. A sales project at month 5 had an actual cost of $34,000, a planned cost of $42,000,
and a value completed of $39,000.

Complete Calculations and explain the message they give the Program Manager.

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4. A construction project at day 70 has actual costs of $78,000 and a scheduled cost of
$84,000. The Work Package Manager estimates a value completed of $81,000.
Complete Calculations and explain the message they give the Program Manager.

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5. Given a project planned to cost $12,000 but actual cost to date is $10,000 so far and the
project is only 70% complete. Calculate the variances.

Complete Calculations and explain the message they give the Program Manager.
Should the customer be happy? (explain more than Yes/No)

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6. A project to build a new taxiway at Culpepper Airport is 5 days behind at day 65. It had a
planned cost of $735,000 for this point in time, but the actual cost is only $550,000. Estimate
the variances and what do they say about the health of the project? Re-estimate if the actual
cost to date had been $750,000.

Complete Calculations and explain the differences and effects.

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7. You have just taken over a project from another project manager. Incomplete information is
available to you on the project status. You have been told that the cost performance index (CPI) = .92,
the earned value (EV) = $322, 000 and the planned value (PV) = $180, 000. What is the actual cost (AC)
for the project?
Show all calculations and Formulas.

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BONUS QUESTION

You have a project that is scheduled to be completed in 10 days at a budgeted cost of $100,000.
At the end of day 6 you do an analysis and you determine the job is 70% complete and you have
spent $65,000.

Assumptions:
1) The following Earned Value Analysis was performed under the assumption that the baseline
plan has a purely linear distribution rate of a) daily planned value, b) daily planned % complete.

2) For the EAC, this report uses the EAC formula of EAC = BAC/CPI, which is one of the EAC
formulas; assuming the current trend of the cost performance will be typical of the project going
forward. (Anbari, 2003)

Questions and Answers:

1. What is the projects earned value? At Day 6th, EV = $70,000.00
2. What is the projects budget at completion? BAC = $100,000.00
3. Is the project ahead, behind schedule or on time? Ahead of schedule.
4. Is the project expected to complete on budget, under or over budget? Under budget.
5. What is the projects SPI? At Day 6th, SPI = 1.17
6. What is the projects CPI? At Day 6th, CPI = 1.08

Suggestions:
Setup Excel Table (for Bonus problem) for your calculations and turn this in with your answers.
Example of an Excel Format is Shown.

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