Earned Value Question! Help
I am not able to get the answers of these question. Please help me and please show the steps how did you solved this.
Question1:
A publishing company undertakes a project to create a book titled BEST PMP PRACTICES. It hires an author and assigns an editor to review the book. Since time allotted to complete the book is short, the editor and the author decide to run this as a project. The author decides that there will be 10 chapters in the book, and that each chapter will take 1 month to finish, and about 5,000 dollars to write. With this plan, he starts writing the book.
At the end of 4 months, he decides to evaluate the status of this project. He finds that he has written 5 chapters and spent 30,000 dollars until now.
For this project, if the current variances are typical of the future, what should be the Estimate at Complete (EAC)?
1. 60,000 dollars
2. 30,000 dollars
3. 55,000 dollars
4. 65,000 dollars
Question 2:
After seeing the response to the hit TV serial 24, the network studio of the serial comes-up with another great idea to produce a similar enthralling TV serial called 48. As a trial, the studio decides to produce only one season that would have 24 episodes, each episode lasting for about 1 hour. After detailed planning, they find that the cost to shoot, edit, pre-process etc. would be about $10m per episode. They also estimate that it would take about 10 days to produce one episode.
At the end of 3 months, the network studio decides to check the status of its new serial. It finds that about 8 episodes are ready for broadcasting and the cost incurred until now is about $90m.
For this project, if the current variances are atypical of the future, what should be the Estimate at Complete (EAC)?
Assume that each month has 30 days.
1. $240m
2. $250m
3. $260m
4. $270m
hdraut1
Tue, 06/14/2011 - 08:32
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Earned Value Calculations
Question 1:
Find out CPI which is EV/AC = 50000/30000= 1.66
As Variance is typical in the future EAC = BAC / CPI = 10000/1.66= 6000
Hence answer is option 1
Question2:
CPI = EV/AC = $80m/$90m = 0.888
EAC = BAC / CPI = $240m/0.888 = $270m
Hence answer is option 4
rishiarien
Tue, 06/14/2011 - 10:59
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Earned value Calculations
Question1
The author has planned to write the book - 1 chapter per month for 5000 dollars
He plans to write 10 chapters. therefore Budge at Completion= 5000 x 10= 50000 dollars
Therefore at the end of 4 months, the author is planning to write 4 chapters for 5000 x 4= 20000 dollars
Planned Value= 20000 dollars at 4months
However he has actually spent 30000 dollars after 4 months
Actual Cost= 30000 dollars
He has actually written 5 chapters instead of 4 at the end of 4 months. 5 chapters would have been 5000x5= 25000 dollars
Earned Value= 25000 dollars
CPI= EV / AC= 25000/ 30000= 0.833
EAC(Typical) = BAC / CPI = 50000 / 0.833 = 60000 dollars
Question 2
Will answer briefly as it is similar to Question 1
BAC= $240 m
PV= $90m
EV= $80m
AC=$90m
EAC (Atypical) =AC+ BAC - EV = $250m
Akshay Singh
Mon, 06/27/2011 - 07:51
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1.) At the end of 4 months
1.) At the end of 4 months
Planned value = 4*5000=20,000
Earned value = 5*5000=25000
Actual cost=30000
SPI=EV/PV=25,000/20000=1.25
CPI=EV/AC=25,000/30,000=.833
As what project has experienced till date will continue in future , hence formula used will be like this
EAC = BAC/CPI = 50,000/.833= 60,000 so answer is 1
For EAC there are 3 formulas.
EAC =AC+BAC-EV(If remaining work is performed at budgeted rate)
EAC = BAC/CPI (If work is performed at present CPI)
EAC = AC + [( BAC-EV)/CPI*SPI- ( if both CPI and SPI need to be taken care of )
2.)
BAC= $240 m
PV= $90m
EV= $80m
AC=$90m
As what project has experienced till date will continue in future , hence formula used will be like this
EAC = BAC/CPI = 240, /.888= 270 so answer is 4.)
Regards
Akshay Singh
akshay@emensuslearning.com
www.emensuslearning.com
pmpSGI
Tue, 06/28/2011 - 20:15
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For Q2. Shouldn't the formula
For Q2. Shouldn't the formula used be EAC = Ac+BAC-EV?? since the variances are aTypical? Can someone please clarify.
Also when do we use - EAC = AC + ((BAC-EV)/CPI) ??
rishiarien
Wed, 06/29/2011 - 06:28
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EAC = AC + ((BAC-EV)/CPI)
Although I have seen this formula on numerous instances, I have made up my mind not to use it. Please note that the formula given in PMBOK for EAC while considering both CPI and SPI is EAC = AC + ((BAC-EV)/CPIxSPI). The formula you have mentioned assumes that SPI is 1.
Three formulae mentioned in PMBOK for EAC
EAC (typical)= BAC/ CPI
EAC (atypical)=AC+BAC-EV
EAC (considering both CPI and SPI) = AC + ((BAC-EV)/CPIxSPI).
I think the three formulae is exhaustive given all considerations. Also, safer to stick with what PMBOK says.
RAMKAMLEKAR7
Fri, 07/01/2011 - 10:56
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Should be other way
Estimate at completion should be other way
1) EAC "No variances" = BAC/CPI
2) EAC "Fundamentally flawed = AC+ETC
3) EAC "Atypical" =AC+BAC-EV
4) EAC " Typical" = AC+(BAC-EV)/CPI