Agribusiness Project Management

July - August 2017

 Session 6:
Earned Value Management
Practice
 Exercise 1

A project consists of 8 work packages (WP)

assigned to separate 8 teams.
Project manager estimated duration and
relationships of that WP. The relevant data
presented in the table below in the next slide.
It is planned, that each team has to deliver weekly
reports.
Each team work costs $1000 per week and each
team has to receive the daily allowances for the
planned duration of its work at the start of the
specific work package.
Activity Predecessor Duration,
weeks
Start - -
A Start 2
B A 2
C A 4
D B, C 2
E D 4
F C 4
G F 3
H E, G 1
End H -
 After 8 weeks from the project start project manager
has decided to evaluate the status of his project.

He find our that:

- Team A has been completed in time.
- Team C has delivered only 3 of panned 4 reports.

No report was submitted from the team B.

Instructions and Questions:

1. Draw the network diagram relevant to the project

data;
2. Complete the forward and backward passes;
3. Define the critical path and activities on it;
4. Calculate SV, CV, SPI, CPI;
5. Analyse status of the project at the end of 8-th
week.
 ES 2 EF

B
LS LF

ES 2 EF ES 2 EF ES 4 EF ES 1 EF

Start A D E H End
LS LF LS LF LS LF LS LF

ES 4 EF ES 4 EF ES 3 EF

C F G
LS LF LS LF LS LF
 3 2 4
B
6 3 7

1 2 2 7 2 8 9 4 12 14 1 14
Start A D E H End
1 0 2 8 1 9 10 1 13 14 0 14

3 4 6 7 4 10 11 3 13
C F G
3 0 6 7 0 10 11 0 13
 A
B
C
D
E
F
G
H
Weeks 1 2 3 4 5 6 7 8 9 10 11 12 13 14
PV, $K 1 1 2 2 1 1 2 2 2 2 2 2 1 1
PV cum., $K 1 2 4 6 7 8 10 12 14 16 18 20 21 22
AC, $K 1 1 2 2 1 1 0 0 0 0 0 0 0 0
AC cum., $K 1 2 4 6 7 8 8 8 8 8 8 8 8 8
EV, $K 1 1 1 1 1 0 0 0 0 0 0 0 0 0
EV cum., $K 1 2 3 4 5 5 5 5 5 5 5 5 5 5
Week PV , Cumul AC, Cumul EV, Cumul CV SV CPI SPI
per ative per ative per ative
week PV week AC week EV
1 1 1 1 1 1 1 0 0 1 1
2 1 2 1 2 1 2 0 0 1 1
3 2 4 2 4 1 3 -1 -1 0.75 0.75
4 2 6 2 6 1 4 -2 -2 0.67 0.67
5 1 7 1 7 1 5 -2 -2 0.71 0.71
6 1 8 1 8 0 5 -3 -3 0.63 0.63
7 2 10 0 8 0 5 -3 -5 0.63 0.50
8 2 12 0 8 0 5 -3 -7 0.63 0.42
 Exercise 2
The project has five sequential phases which are
following each other and are presented in the table
below.
Today is the end of 5-th month and project
manager has to analyse and report to the sponsor
the project status.

Task Duration, month Budget, $

Phase 1 1 10 000
Phase 2 1 10 000
Phase 3 1 10 000
Phase 4 2 10 000
Phase 5 1 10 000
Following information is recorded about project
performance:
Phase 1 started and finished in time and spent as it was
planned;
Phase 2 started in time but finished next month. It spent
$2 000 more than was planned;
Phase 3 started with some delay due to late finish of its
predecessor and didnt manage to finish in time but only next
month. It spent $2 500 over planned budget;
Phase 4 started with some delay due to late finish of its
predecessor and at the status check day completed only 25%
of planned work. It spent $7 000;
Phase 5 is not started yet.
Calculate schedule and cost status parameters and
based on that analyse the project status and make a
forecast.
 Task Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Status at
the end
of 5th
month
Requirements
Architecture
Design
Code
Testing
 Task Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Status at the end of
5th month
Requirements s-f Completed;
Spent $10 000
Architecture s-pf- -f Completed;
Spent $12 000
Design ps-s-pf -f Completed;
Spent $12 500
Code ps-s- -pf 25% completion;
Spent $7 000
Testing ps-pf Not started yet

Legend: s start, f finish, ps planned start, pf planned finish

Parameter Calculation Answer Interpretation of
the answer
PV
EV
AC
BAC
CV
CPI
SV
SPI
EAC
ETC
VTC
Parameter Calculation Answer Interpretation of
the answer
PV $10K+$10K+$10K+$10K $40K
EV $10K+$10K+$10K+$2.5K $32.5K
AC $10K+$12K+$12.5K+$7K $41.5K
BAC $10K+$10K+$10K+$10K+$10K $50K
CV $32.5K - $41.5K - $9K
CPI $32.5K / $41.5K 0.78
SV $32.5K - $40K - $7.5K
SPI $32.5K / $40K 0.81
EAC $50 / 0.78 $64.1K
ETC $64.1K - $41.5K $22.6K
VTC $50K - $64.1K - $14.1K
 Exercise 3

Project manager and his team decomposed

project into 6 tasks, defined relationships between
the tasks, estimated tasks durations and costs
(the relevant data presented in the table on the
next slide).
Project manager decided to check project
performance biweekly.
 Exercise 3

Background information:

Task ID Duration, Dependences Cost, $K

weeks
Task 1 A 4 - 40
Task 2 B 5 - 32
Task 3 C 4 48
Task 4 D 5 , 18
Task 5 E 3 28
Task 6 F 2 , D, 40
Instructions and Questions:

1. Draw the network diagram relevant to the project

data
2. Complete the forward and backward passes
3. Prepare project budget weekly distribution table
4. Define the critical path and activities on it
5. Calculate SV, CV, SPI, CPI and analyse the status
of the project values biweekly up to the end of 8 th
week.
 5 4 8
C
1 4 4 7 2 10
A
2 1 5 6 5 10 11 2 12
Start D F End
6 0 10 11 0 12
1 5 5 Path A-C-F
B 6 3 8 Dur. 4+4+2 = 10 weeks

1 0 5 E Path A-D-F
Dur. 4 +5+2 = 11 weeks
8 2 10
Path B-D-F
Dur 5+5+2 = 12 weeks
Path B - E- F
Dur. 5+3+2 = 10 weeks
 Budget weekly distribution

ID Budget, 1 2 3 4 5 6 7 8 9 10 11 12
$K
A 40 10 10 10 10
B 32 8 4 8 4 8
C 48 12 12 12 12
D 18 6 2 2 2 6
E 28 8 8 12
F 40 20 20
206 18 14 18 14 20 26 22 26 2 6 20 20
Cumulative 18 32 50 64 84 110 132 158 160 166 186 206
total, $K
 Project status at the end of 2 nd week
Reported data

% completion and AC reported from the project site

Task % completion EV, $K AC, $K PV, $K CV, $K SV, $K
A 75 25
B 50 12
Cumulative total: 37
 Project status at the end of 2 nd week
Reported and Calculated data

Reported and calculated data

Task % completion EV, $K AC, $K PV, $K CV, $K SV, $K

A 75 30 25 20 5 10

B 50 16 12 12 4 4

Cumulative total: 46 37 32 9 14
 Project status at the end of 2 nd week
Reported and calculated data
Task % completion EV, $K AC, $K PV, $K CV, $K SV, $K
A 75 30 25 20 5 10
B 50 16 12 12 4 4
Cumulative total: 46 37 32 9 14

It was planned by the end of 2 nd week to make a work with

budgetary cost of $ 32 000. But actually the work worth of $ 46 000
was completed and spent for that $ 37 000.
Project is ahead of schedule:
SV = $14 000; SPI = 1.44
and saves the budget:
CV = $ 9 000; CPI = 1.24
 Project status at the end of 4 th week
Reported data

% completion and AC reported from the project site

Task % completion EV, $K AC, $K PV, $K CV, $K SV, $K

A 100 35

B 100 24

Cumulative total: 59
 Project status at the end of 4 th week
Reported and Calculated data

Reported and calculated data

Task % completion EV, $K AC, $K PV, $K CV, $K SV, $K

A 100 40 35 40 5 0

B 100 32 24 24 8 8

Cumulative total: 72 59 64 13 8
 Project status at the end of 4 th week

Reported and calculated data

Task % EV, $K AC, $K PV, $K CV, $K SV, $K
completion
A 100 40 35 40 5 0
B 100 32 24 24 8 8
Cumulative total: 72 59 64 13 8

It was planned by the end of 4 th week to make a work with

budgetary cost of $ 64 000. But actually the work worth of
$ 72 000 was completed and spent for that $ 59 000.
Project is ahead of schedule:
SV = $ 8 000; SPI = 1.13
and saves the budget:
CV = $ 13 000; CPI = 1.22
 Project status at the end of 6 th week
Reported data

Task % completion EV, $K AC, $K PV, $K CV, $K SV, $K

A 100 35
B 100 24
C 75 24
D 0 0
E 50 10
Cumulative total: 93
 Project status at the end of 6 th week
Reported and Calculated data

Task % completion EV, $K AC, $K PV, $K CV, $K SV, $K

A 100 40 35 40 5 0
B 100 32 24 24 8 0
C 75 36 24 24 12 12
D 0 0 0 6 0 -6
E 50 14 10 8 4 6
Cumulative total: 122 93 110 29 12
 Project status at the end of 6 th week
Task % completion EV, $K AC, $K PV, $K CV, SV, $K
$K
A 100 40 35 40 5 0
B 100 32 24 24 8 0
C 75 36 24 24 12 12
D 0 0 0 6 0 -6
E 50 14 10 8 4 6
Cumulative total: 122 93 110 29 12

It was planned by the end of 6 th week to make a work with

budgetary cost of $ 110 000. But actually the work worth of
$ 122 000 was completed and spent for that $ 93 000.
Project saves the budget: CV = $ 29 000; CPI = 1.31
Though we have positive cumulative schedule variance
(SV=$12 000), we cant say that we are ahead of schedule
because critical task D is delayed (SV = - $ 6 000).
 Project status at the end of 8 th week
Reported data

Task % completion EV, $K AC, $K PV, $K CV, $K SV, $K

A 100 35
B 100 24
C 100 32
D 33 20
E 100 20
Cumulative total: 131
 Project status at the end of 8 th week
Reported and Calculated data

Task % completion EV, $K AC, $K PV, $K CV, $K SV, $K

A 100 40 35 40 5 0
B 100 32 24 32 8 0
C 100 48 32 48 16 0
D 33 6 20 10 - 14 -4
E 100 28 20 28 8 0
Cumulative total: 154 131 158 23 -4
 Project status at the end of 8 th week
Task % completion EV, $K AC, $K PV, $K CV, $K SV, $K
A 100 40 35 40 5 0
B 100 32 24 32 8 0
C 100 48 32 48 16 0
D 33 6 20 10 - 14 -4
E 100 28 20 28 8 0
Cumulative total: 154 131 158 23 -4

It was planned by the end of 8 th week to make a work with

budgetary cost of $ 158 000. But actually the work worth of
$ 154 000 and was spent for that $131 000.
Project saves the budget: CV = $ 23 000; CPI = 1.18
We are behind of schedule because we have negative
cumulative schedule variance (SV= - $ 4 000) due to
delay of critical task D.
 Project performance efficiency

Time period EV, $K AC, $K PV, $K SPI CPI PCI-B

2 46 37 32 1.44 1.24 22%
4 72 59 64 1.13 1.22 35%
6 122 93 110 1.11 1.31 59%
8 154 131 158 0.97 1.18 75%

P-CIB = EV/BAC

P-CIB (Percent Complete Index Budget) shows the achieved

progress of the project.
BAC Budget At Completion, which is $ 206 000 for this case.
 Project cost forecast

Time period EV, $K AC, $K PV, $K SPI CPI PCI-B

2 46 37 32 1.44 1.24 22%
4 72 59 64 1.13 1.22 35%
6 122 93 110 1.11 1.31 59%
8 154 131 158 0.97 1.18 75%

EAC = BAC / CPI = $206K / 1.18 = $175K

VAC = BAC EAC = $206K $175K = $31K

It is possible to save $ 31K.

Project is behind of schedule to a little degree because SPI 1.