Earn Value Sample Question

Problem Definition

Your team has been assigned to construct a road of 5.5 km including a bridge of 500m in 35 days.

The total cost for the project is Rs. 35,000,000/- and the cost for constructing the bridge is Rs. 10,000,000/- .

You expect to complete the bridge in 10 days and the remaining road in 25 days .

You are monitoring daily progress and the data for the first 20 days shows the following progress : Day 1-12 – Bridge completed ,

Daily road work progress from day 13 to 20 – 240 m , 300m , 200m, 160m. 220m, 250m , 290m, 140m. The cost spent till date is as follows : Bridge Rs. 12,500,000/- , daily cost from day 13 to 20 days is Rs. 1,100,000/- per day .

What is the schedule and cost variance on Day 20 ?

a) SV = + Rs. 1,000,000/- CV = + Rs1,300,000/-

b) SV = – Rs. 1,000,000/- CV = – Rs1,300,000/-

c) SV = – Rs. 1,000,000/- CV = – Rs 2,300,000/-

d) SV = – Rs. 2,000.000/- CV = – Rs. 1,30,000/

Answer (Author Analysis)

 

Figure 1 – Scheduled and Actual Project

Bridge day 12

500m in 10 days budget of 10 Million, BAC Bridge = 10 Million

Scheduled Daily rate Bridge = BAC Bridge / scheduled duration = 10Million / 10 days = 1Million /days

Scheduled Productivity Rate Bridge= BAC Bridge / scheduled duration= 500m/10 days = 50m/days

BCWS Bridge = Daily rate Bridge x scheduled days = 1Million /days x 10 days = 10 Million,

BCWP Bridge = BAC Bridge = 10Million,

ACWP Bridge = 12.5 Million.

Bridge done in day 12^th. Consuming 12 working days behind schedule by 2 days.

Road day 20

5 Km = 5000m in 25 days

Road Budget = Total Budget – Bridge Budget = 35Million – 10 Million = 25 Million

Scheduled Daily Rate Road = BAC Road / scheduled duration = 25 Million / 25 days = 1 Million / days

Scheduled Productivity Rate Road = BAC Road / scheduled duration = 5000m / 25 days = 200m/days

BCWS Road scheduled to be started in day 11 to day 20 which means 10 days duration

BCWS = Daily rate Road x scheduled days = 1Million /days x 10 days = 10 Million.

Or BCWS worth for 10 days x Scheduled Productivity Rate Road = 10 days x 200m/days = 2000m

BCWP Road is cumulative work progress from day 13 to 20 – 240 m , 300m , 200m, 160m. 220m, 250m , 290m, 140m. Cumulative of 1800m.

Day 13 to day 20 in 8 days duration scheduled to accomplished = 8 days x Scheduled Productivity Rate Road = 8 days x 200m/days = 1600m

It means in 8 days accomplished 1800m, 1800m -1600m= 200m more than scheduled, ahead of schedule by 200 m or equal as one day more, equal to 9 days work (9 day x 200m / day = 1800m)

Scheduled 1600 m equal to 8 days worth value of = 8 days x Daily Rate Road = 8 days x 1 Million / days = 8 Million.

200m variance worth of 1 days work which worth for 1 days x  Daily Rate Road = 1 days x 1 Million /days = 1 Million.

So BCWP value is 1800m = 1600m + 200m = 8 Million + 1 Million = 9 Million

ACWP Road  = Variable Cost x Actual Duration = 1.1 Million / days x 8 days = 8.8 Million

SV = (BCWPbridge+ BCWProad) – (BCWSbridge + BCWSroad)

SV = (10M + 9M) – (10M + 10M) = 19M – 20M = -1M behind schedule by value worth of 1 M

CV =(BCWPbridge +BCWProad) – (ACWPbridge+ ACWProad)

CV = (10 M + 9M) – (12.5 + 8.8M) = 19M – 21.3M = -2.3M

Answer C

References:

1. Rao, Alakananda (2013). I want to be a PMP® linkedin group . Questions from PMBok Fifth edition – Cost. Retrieved September 17, 2013 from http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&discussionID=273704434&gid=2356441&commentID=164805938&goback=%2Enpv_94027909_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_nav*4responsive*4tab*4profile_*1&trk=NUS_DISC_Q-subject#commentID_164805938