Exercise 13.32
Using the following data, enter the various tasks and create a Gantt chart using MS Project. Assign the individuals responsible for each activity and once you have completed the network, update it with the percentage complete tool. What does the MS Project output file look like? Activity Duration Predecessors Resource % Complete
A. Research product 6 — Tom Allen 100
B. Interview customers 4 A Liz Watts 75
C. Design survey 5 A Rich Watkins 50
D. Collect data 4 B, C Gary Sims 0
Exercise 13.33
Now, suppose we assign costs to each of the resources in the following amounts:
Resource Cost
Tom Allen $50/hour
Liz Watts $55/hour
Rich Watkins $18/hour
Gary Sims $12.50/hour
Create the resource usage statement for the project as of the most recent update. What are project expenses per task to date?
Exercise 13.34
Use MS Project to create a Project Summary Report of the most recent project status.
Exercise 13.35
Using the data shown in the network precedence table below, enter the various tasks in MS Project. Then select a date approximately halfway through the overall project duration, and update all tasks in the network to show current status. You may assume that Activities A through I are now 100% completed. What does the tracking Gantt look like?
Project—Remodeling an Appliance
Activity Duration Predecessors
A. Conduct competitive analysis 3 —
B. Review field sales reports 2 —
C. Conduct tech capabilities assessment 5 —
D. Develop focus group data 2 A, B, C
E. Conduct telephone surveys 3 D
F. Identify relevant specification improvements 3 E
G. Interface with marketing staff 1 F
H. Develop engineering specifications 5 G
I. Check and debug designs 4 H
J. Develop testing protocol 3 G
K. Identify critical performance levels 2 J Activity Duration Predecessors
L. Assess and modify product components 6 I, K
M. Conduct capabilities assessment 12 L
N. Identify selection criteria 3 M
O. Develop RFQ 4 M
P. Develop production master schedule 5 N, O
Q. Liaison with sales staff 1 P
R. Prepare product launch 3 Q
Exercise 13.36
Use the following information to construct a Gantt chart in MS Project. What is the expected duration of the project (critical path)? Assume the project is halfway finished in terms of the schedule (day 16 completed) but activity completion percentages are as shown. Construct a tracking Gantt chart for the project (be sure to show the percentage complete for each activity). What would it look like?
Activity
Duration
(in Days) Predecessors
% Completed
(Day 16)
A 6 None 100%
B 2 A 100%
C 4 A 100%
D 7 C 14%
E 10 D 0%
F 6 B, C 33%
G 5 E, F 0%
Exercise 13.37
Using the data for Exercise 13.36, add the resource assignments to each of the activities and input their hourly rates as shown. Construct an earned value chart for the project. Which activities have negative variances? What is the estimate at completion (EAC) for the project? (Hint: Remember to click “Set baseline” prior to creating the EVM table. This table is found by clicking on the “View” tab, then “Tables,” then “Other Tables.”)
Resource Name Hourly Rate ($)
Josh 12.00
Mary 13.50
Evan 10.00
Adrian 22.00
Susan 18.50
Aaron 17.00
Katie 32.00
PMP CERTIFICATION SAMPLE QUESTIONS
13.38 Suppose your PV for a project was $100,000 and your EV was $60,000. Your Schedule Performance Index (SPI) for this project would be:
a. 1.52
b. .60
c. You cannot calculate SPI with the information provided
d. 1.66
13.39 Activity A is worth $500, is complete, and actually cost $500. Activity B is worth $1,000, is 50% complete, and has actually cost $700 so far. Activity C is worth $100, is 75% complete, and has actually cost $90 so far. What is the total earned value for the project?
a. $1,600
b. $1,075
c. $1,290
d. – $1,075
13.40 Using the information in Question 13.39, calculate the Cost Performance Index (CPI) for the project.
a. 1.20
b. -1.20
c. 0.83
d. -0.83
13.41 Which of the following gives the remaining amount to be spent on the project in Questions 2 and 3 based on current spending efficiency?
a. Budget remaining
b. Estimate to complete
c. Cost variance
d. Cost Performance Index (CPI)
13.42 Activity A is worth $100, is complete, and actually cost $150. Activity B is worth $500, is 75% complete, and has actually cost $400 so far. Activity C is worth $500, is 25% complete, and has actually cost $200 so far. What is the estimated cost to completion for the project?
a. $1,100
b. $750
c. $880
d. $1,375
13.43 Your project has been running into a series of unexpected problems, and at the latest project review meeting you calculated that the current schedule performance index was .70, while the cost performance index (CPI) was 1.35. Now the customer has asked for a scope change that looks to be a significant modification. What should your response be?
a. Alert top management about the pending schedule delays
b. Alert top management about the pending cost overruns
c. Inform the customer that you cannot comply with the requested scope changes
d. Alert top management about the customer’s change request
13.44 A software coding project was scheduled to be finished today, after 12 weeks of work. You receive an updated EVM report on the progress of the coding suggesting that it has a schedule performance index (SPI) value of .75. Based on this information, when do you expect the coding
to be finished?
a. One week early
b. In one more week
c. In two more weeks
d. In four more weeks
13.45 Your project control administrator submits an interim report to you stating that, as of the current period, your project has a CPI of 1.4. How should you interpret this information?
a. You are spending $1.40 for every dollar you are earning on this project
b. You are earning value on this project at 1.4 times the rate you had planned
c. This number is meaningless with the SPI number
d. You are earning value on this project at 0.71 times the rate you planned
13.46 When the schedule variance is equal to zero (SV = $0.00), what else is true?
a. Schedule variance can never equal zero
b. The SPI must be greater than one
c. Earned value must equal planned value
d. The CPI must be equal to one
13.47 Your project is scheduled to last 3 months and cost $100,000. At the end of the first month, the project is 25% complete. What is the Earned Value?
a. Cannot determine from this information
b. $25,000
c. $400,000
d. $20,250
Answers
13.38. b—SPI is calculated by dividing earned value (EV) by planned value (PV).
13.39. b—Earned Value is $1,075 to date.
13.40. c—CPI is calculated as earned value (EV) divided by actual cost (AC). In this case, that is $1.075/$1,290, or 0.83.
13.41. b—Estimate to complete.
13.42. d—Estimate to completion is based on the formula
(1/.80) * $1,100, or $1,375.
13.43. a—The most serious information from this meeting is the significant schedule delay and this should be reported to top management.
13.44. d—With a planned finish of 12 weeks and an SPI of .75, expected completion is 12/.75, or 16 weeks.
13.45. b—This is good news. You are earning value on the project at a rate of 1.4 times the rate you had planned (PV).
13.46. c—Schedule variance is Earned Value minus Planned Value (EV-PV), so when SV = zero, EV must equal PV.
13.47. b—Budgeted cost at completion is $100,000, and you have completed 25% of the project. You have earned $25,000 to date.
Notes
1. “Government Waste: Can’t track spending on $4.3 billion Army system to track spending,” (2014), Money Tips, Sept 24, retrieved at: https://www.moneytips.com/4-3-billion-program-to-track-spending/320; Flatten, M. (2014). “Army can’t track spending on $4.3b system to track spending, IG finds,” Washington Examiner, Sept 4, retrieved at: http://www.washingtonexaminer.com/army-cant-track-spending-on43b-system-to-track-spending-ig-finds/article/2552808; Paltrow, S. J. (2013). “The high cost of the Pentagon’s poor bookkeeping,” The Fiscal Times, Dec. 24, retrieved at:
http://www.thefiscaltimes.com/Articles/2013/12/24/High-Cost-Pentagon-s-Poor-Bookkeeping.
2. Departments of the Air Force, the Army, the Navy, and the Defense Logistics Agency. (1987). Cost/Schedule Control Systems Criteria: Joint Implementation Guide. Washington, DC: U.S. Department of Defense; Fleming, Q., and Koppelman, J. (1994). “The essence of evolution of earned value,” Cost Engineering, 36(11): 21–27; Fleming, Q., and Koppelman, J. (1996). Earned Value Project Management. Upper Darby, PA: Project Management Institute; Fleming, Q., and Koppelman, J. (1998, July). “Earned value project management: A powerful tool for software projects,” Crosstalk: The Journal of Defense Software Engineering, pp. 19–23; Hatfield, M. A. (1996). “The case for earned value,” PMNetwork, 10(12): 25–27; Robinson, P. B. (1997). “The performance measurement baseline—A statistical view,” Project Management Journal, 28(2): 47–52; Singletary, N. (1996). “What’s the
value of earned value?” PMNetwork, 10(12): 28–30.
3. Project Management Institute’s Project Management Body of Knowledge (PMBoK), 5th Edition. Copyright and all rights reserved. Material from this publication has been reproduced with the permission of PMI. 4. Brandon, Jr., D. M. (1998). “Implementing earned value easily and effectively,” Project Management Journal, 29(2): 11–18.
5. Brandon, Jr., D. M. (1998), ibid.
6. Petro, T., and Milani, K. (2000). “Northrop Grumman’s four-tier approach to earning value,” Management Accounting Quarterly, 1(4): 40–48.
7. Christensen, D. S., McKinney, J., and Antonini, R. (1995). “A review of estimate at completion research,” Journal of Cost Analysis, pp. 41–62; Christensen, D. S. (1998). “The costs and benefits of the earned valued management process,” Acquisition Review Quarterly, 5, pp. 373–86; Marshall,
R. A., Ruiz, P., and Bredillet, C. N. (2008). “Earned value management insights using inferential statistics,” International Journal of Managing Projects in Business, 1: 288–94.
8. Lipke, W. J. (2003, Spring). “Schedule is different,” The Measurable News, pp. 10–15.
9. Magnaye, R. B., Sauser, B. J., and Ramirez-Marquez, J. E. (2010). “Systems development planning using readiness levels in a cost of development minimization model,” Systems Engineering, 13: 311–323; Magnaye, R., Sauser, B., Patanakul, P., Noqicki, D., and Randall, W. (2014). “Earned
readiness management for scheduling, monitoring and evaluating the “Development of complex product systems,” International Journal of Project Management, retrieved at:http://dx.doi.org/10.1016/j.ijproman.2014.01.009.
10. Morris, P. W. G. (1988). “Managing project interfaces—Key points for project success,” in Cleland, D. I., and King, W. R. (Eds.), Project Management Handbook, 2nd ed. New York: Van Nostrand Reinhold, pp. 16–55.
11. Baker, B. N., Murphy, D. C., and Fisher, D. (1988). “Factors affecting project success,” in Cleland, D. I., and King, W. R. (Eds.), Project Management Handbook, 2nd ed. New York: Van Nostrand Reinhold, pp. 902–19.
12. Morris, P. W. G. (1988), as cited in note 9.
13. Slevin, D. P., and Pinto, J. K. (1987). “Balancing strategy and tactics in project implementation,” Sloan Management Review, 29(1): 33–41; Pinto, J. K. (1998). “Critical success factors,” in Pinto, J. K. (Ed.), Project Management Handbook. San Francisco, CA: Jossey-Bass, pp. 379–95; Slevin, D. P.,
and Pinto, J. K. (1986). “The project implementation profile: New tool for project managers,” Project Management Journal, 17(3): 57–70; Belout, A., and Gauvreau, C. (2004). “Factors affecting project success: The impact of human resource management,” International Journal of Project
Management, 22: 1–11; Belout, A. (1998). “Effect of human resource management on project effectiveness and success: Toward a new conceptual framework,” International Journal of Project Management, 16: 21–26.
14. Beck, D. R. (1983). “Implementing top management plans through project management,” in Cleland, D. I., and King, W. R. (Eds.), Project Management Handbook. New York: Van Nostrand Reinhold, pp. 166–84.
15. Manley, J. H. (1975). “Implementation attitudes: A model and a measurement methodology,” in Schultz, R. L., and Slevin, D. P. (Eds.), Implementing Operations Research/Management Science. New York: Elsevier, pp. 183–202.
16. Lock, D. (2000). “Managing cost,” in Turner, J. R., and Simister, S. J. (Eds.), Gower Handbook of Project Management, 3rd ed. Aldershot, UK: Gower, pp. 293–321.
17. www.acq.osd.mil/pm/evbasics.htm.
18. http://psncentral.com/research/SSC.htm; “Superconducting Supercollider project hangs on edge.” (1993, September 27). Boston Globe, p. 1 “Texas lands the SSC.” (1988, November 18). Science, 242: 1004; “University consortium faulted for management, accounting.” (1993, July 9). Science, 261: 157–58.
19. Nagourney, A. (2016). “Hawaii struggles to keep rail project from becoming a boondoggle,” New York Times, Mar
20, retrieved at: https://www.nytimes.com/2016/03/21/us/hawaii-struggles-to-keep-rail-project-from-becominga-boondoggle.html; Zimmerman, M. (2017). “Ex-Hawaii gov to Trump: End ‘wasteful’ project that will change beauty of Honolulu,” Fox News, Apr 21, retrieved at:
http://www.foxnews.com/politics/2017/04/21/exhawaii-gov-to-trump-end-wasteful-rail-project-that-willchange-beauty-honolulu.html; Prevedouros, P. (2016). “Live from Honolulu: HART Rail, a megaproject failure in the making,” New Geography, Jan 27, retrieved at: http://www.newgeography.com/content/005156-live-honoluluhart-rail-a-megaproject-failure-making.
20. Lipke, W. H. (2003, Spring). “Schedule is different,” The Measureable News, pp. 10–15; Lipke, W. H. (2009). Earned Schedule. Lulu Publishing; Book, S. A. (2006, Spring).
“Earned schedule and its possible unreliability as an indicator,” The Measureable News, pp. 24–30; Lipke, W. H. (2006, Fall). “Applying earned schedule to critical path analysis and more,” The Measureable News, pp. 26–30; Book, Stephen A. (2003, Fall). “Issues associated with
basing decisions on schedule variance in an earned-value management system,” National Estimator, Society of Cost Estimating and Analysis, pp. 11–15; www.earnedschedule.com; Vanhouckel, M., and Vandevoorde, S. (2007). “A simulation and evaluation of earned value metrics to forecast the project duration,” Journal of the Operational Research Society, 58(10): 1361–74.
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