cost and schedule variances

Submitted by vijayavadrevu on Tue, 04/30/2013 - 18:03

 102. A project manager is working on a highly visible project in an organization and is most concerned about project performance and progress. His cost variance is currently $150 and schedule variance percentage is -15%. Which of the following statements about the cost and schedule performance of the project is INCORRECT?

·       A)  

The project spent more money on work accomplished than planned

·         B)

The project has overestimated the amount of time needed for the activity

·         C)

The Project has faced some unplanned or planned setbacks which has affected the schedule

·         D)

The project is doing favorably cost wise but is lagging in schedule

             Answer is given as A. I have answered as D

Ca        Can some one explain as to why is it A?        

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crushPMP

Tue, 04/30/2013 - 19:10

I thought it's D also. Any help here...

abdsal

Wed, 05/01/2013 - 09:36

 They are asking for the incorrect statement. option D is correct  

pmpnewster

Wed, 05/01/2013 - 03:45

CV = EV - AC = $ 150, means that the project has earned more than it has expended.  GOOD.

SV %  = ((EV - PV)/PV)*100  =  -15   =>  (SPI -1)*100 = -15  =>  SPI = 0.85.   NOT SO GOOD.

 

From the above numbers, the project is doing okay cost-wise, but not ok schedule-wise. This is a CORRECT statement, which is similar to option D above.

Option C can also be a CORRECT stmt, since project has indeed slipped time-wise.

But we are asked to select the INCORRECT stmt, so C & D cannot be the answer.

Reg option A & B, I am not sure. They both seem like INCORRECT stmts and either could be the answer.

 

IF option B had said 'UNDERestimated', then it could have been eliminated... and then option A would have been the answer.

BTW, how did you eliminate option B?

Can you please provide the official explanation?

Thanks!
 

siddus

Wed, 05/01/2013 - 05:45

I agree with pmpnewster regarding options C & D. Very good explanations. 

Option A is basically asking us whether AC > PV?

We know that EV - AC > 0, this implies EV > AC
We also know that EV - PV < 0, this implies EV < PV
Therefore, AC < EV < PV

Since AC < PV, I presume option A is definitely incorrect. 

Lets look at Option B: "The project has overstimated the time needed for the activity"

Looking at the statement, we cannot say for sure whether the time estimate for a particular activity was underestimated or overestimated. We are not told whether the activity in question was on the critical path or not. Looking at the schedule variance for the complete project, we cannot infer much about an activity. Therefore, option B may or may not be true. However, option A is definitely false. 

So option A?

 

 

 

abdsal

Wed, 05/01/2013 - 09:47

 Out of the 2 choices A&B  the best choice is choice A

 

 

abdsal

Wed, 05/01/2013 - 09:47

 Out of the 2 choices A&B  the best choice is choice A