PROJECT MANAGEMENT CONTROL AND MONITORING
CHAPTER 8 : TUTORIAL EARNED VALUE
Tutorial : EARNED VALUE Name:
1.
2.
3.
4.
5.
Group:
Damai Sdn Bhd has awarded a contract for the production of LED Advertising Screen to
company Gembira Sdn Bhd .
The contract calls for Gembira Sdn Bhd to produce:
-500 LED Screen for Advert A and
-1,000 LED Screen for Advert B .
It further states that Gembira Sdn Bhd will produce:
- LED Screen for Advert A at the rate of 100 per month and
- LED Screen for Advert B at the rate of 250 per month.
-Production of LED Screen for Advert A is to start on January 1, and
The project plan for LED Screen for Advert A as follows:
Activity Start End Elapsed Number of Total Cost
Time Item
LED Screen Jan 1 May 31 5 months 500 RM100,000
for Advert A
A quick glance reveals that you budgeted RM200 a copy for LED Screen for Advert A
(RM100,000 / 500 copies)
Suppose it’s the end of March, and you’re three months into the project. Here’s what has
happened as of March 31:
Activity Start Elapsed Time Number of Item Total Cost
LED Screen Jan 1 3 months 150 RM45,000
for Advert A
Your job is to figure out your schedule and cost performances to date and to update your
forecast of the total amount you’ll spend for LED Screen for Advert A. Follow these steps:
1. Determine the planned value (PV), earned value (EV), and actual cost (AC) for
Brochure A and explain your results
PV = RM200 per LED Screen × 100 LED Screen per month × 3 months = RM60,000
EV = RM200 per LED Screen × 150 LED Screen = RM30,000
AC = RM45,000
2. Determine the schedule variance (SV), cost variance (CV), schedule performance
index (SPI), and cost performance index (CPI) for the production of LED Screen for
Advert A. Explain your results
SV = EV – PV = RM30,000 – RM60,000 = –RM30,000 (BEHIND SCHEDULE)
CV = EV – AC = RM30,000 – RM45,000 = –RM15,000 (OVER BUDGET)
SPI = EV / PV = RM30,000 / RM60,000 = 0.50 (BEHIND SCHEDULE)
CPI = EV / AC = RM30,000 / RM45,000 = 0.67 (COST OVERRUN)
3. Use SPI to estimate the completion time and how much longer it will take to finish this
project.
(budgeted time / SPI)
Estimate completion time , 5 months/ 0.50 = 10 months
Thus, 10 months – 3 months = 7 more months to finish the product
QUESTION 1
The contract also calls for Gembira Sdn Bhd to produce 1,000 LED Screen for Advert B.
It further states that Gembira Sdn Bhd will produce LED Screen for Advert B at the rate of
250 per month.
Production of LED Screen for Advert B is to start on February 1.
You budgeted RM100 a copy for LED Screen for Advert B (RM100,000 / 1,000 copies).
The project plan for LED Screen for Advert B as follows:
Plan for Gembira Sdn Bhd to Produce Brochures B
Activity Start End Elapsed Number of Total Cost
Time Item
Feb 1 May 31 4 months 1,000 RM100,000
LED Screen
for Advert B
Suppose it’s the end of March, and you’re two months into the project. Here’s what has
happened as of March 31:
Project Status as of March 31:
Activity Start Elapsed Time Number of Item Total Cost
Feb 1 2 months 600 RM30,000
LED Screen
for Advert B
1. Determine the planned value (PV), earned value (EV), and actual cost (AC) for
LED Screen for Advert B. Explain your results.
2. Determine the schedule variance (SV), cost variance (CV), schedule
performance index (SPI), and cost performance index (CPI) for the production
of LED Screen for Advert B. Explain your results
3. Use SPI to estimate the completion time and how much longer it will take to finish this
project. (budgeted time / SPI)
QUESTION 2
Assume you have to complete project ABC within 6 months. Given the following information
as part of the payment received for one particular phase of a project ABC.
a) Perform the following and explain your results.
i. Cost Variance (CV)
ii. Schedule Variance (SV)
iii. Cost Performance Index (CPI)
iv. Schedule Performance Index (SPI)
v. Use the schedule performance index (SPI) to estimate the completion time and how
much longer it will take to finish this project.
QUESTION 3
Given the following information on work break down structure project progress. Calculate
the earned value of each task and total.
Task Duration % task Rate Earned Value
completed (per week)
Identify 10 weeks 60 RM1200.00
Requirement
System 3 weeks 9 RM300.00
Design
Prototype 12 weeks 0 RM400.00
development
System 3 weeks 100 RM1000.00
Testing
Total Earned Value