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Resource Leveling Using AIB's Tutorial This kind of problem almost always finds its way onto the quiz and final. The topic is not well covered in our reading, and is covered in a complex way in our Week-4 lecture, so I've created this supplementary material and exercises to help explain the problem space and to introduce some simple tools and procedures to handle them. The idea of resource leveling is to handle resource conflicts in such a way as to minimize their impacts on the project schedule and budget. In actual practice, this can be a complex and multifaceted problem. In this course, we will boil it down to its essentials and simplify the problem by constraining the possible solution sets. In our study here, the solution to resource conflicts is to: 1) Increase resources (staff or equipment). This usually has impacts on the budget. 2) Serialize the conflicted tasks. That is, instead of doing two tasks at the same time with the same resources, do one then the other. This usually has impacts on the schedule. 3) Split the conflicted task(s) up into multiple pieces to eliminate the conflict. Frequently this is the lowest cost solution in terms of both budget and schedule (if allowed and doable). Let's review some sample problems and you will see what I mean Problem #1 We are building an equity trade allocation system. The sponsor has made it clear that we need to minimize project duration and (in order to provide continuity throughout the project) the same individual must handle all activities under his or her discipline. Activities on this project cannot be split. So we need to find a solution that doesn't require new resources, doesn’t split tasks and minimizes schedule increases. That suggests (or the author is trying to nudge you toward) serializing the conflicted tasks (option 2 above). DP George Integrated Cost and Schedule Control in Project Management 1 Resource Leveling Using AIB's Tutorial Here are the task details for this scenario. Task A B C D E F Duration 3 Weeks 2 Weeks 4 Weeks 2 Weeks 2 Weeks 1 Week Predecessors A A A B D Resources/Rate 1 Database Specialist (Rate:$5000 a wk) 1 Prototype Builder (Rate:$4500 a wk) 1 Open Server Engineer (Rate:$4000 a wk) 1 Open Server Engineer (Rate:$4000 a wk) 1 GUI Developer (Rate:$3900 a wk) 1 QA Engineer (Rate:$3700 a wk) The first thing we need to do is create an AIB and find the CP(s). It looks like we have two Critical Paths ABE and AC. A quick review of the resources column above shows that the only possible resource conflict is with the Open Server Engineer (since that is the only resource used more than once). So Task C and Task D may be in conflict. Task C starts on Week-3 and ends at the start of Week-7. Task D also starts on Week-3 and ends at the start of Week-5. So we do have a problem! Clearly, the Open Server Engineer can't be doing both tasks, full time, at the same time during weeks 3 and 4 . Our approach is to serialize the tasks (make Task-D dependent on Task-C or make Task-C dependent on Task-D). But which way is best? Well, the way to find out is to try them both. DP George Integrated Cost and Schedule Control in Project Management 2 Resource Leveling Using AIB's Tutorial Here is what happens if we make Task-C dependent on Task-D to solve the over allocated Open Server Engineer problem. Here the Server Engineer first does Task D during weeks 3 through the beginning of Week-5 and then does Task-C during weeks 5 - 9. This has the effect of lengthening the project from 7 weeks (as originally schedule) to 9 weeks. Let's try it the other way around, Task C THEN Task D. This solution is worse! We go from 7 weeks to 10 weeks. So the first option is the best solution given our constraints. It cost us a two-week delay on the project effort. DP George Integrated Cost and Schedule Control in Project Management 3 Resource Leveling Using AIB's Tutorial In this case, the schedule took a hit but not the budget. The budget remained the same because the hours worked remained the same. In the original schedule the Open Server Engineer was working 4 weeks on Task C and 2 weeks on task D. In the revised schedule the hours are the same (and therefore the cost), but instead of working 8 hours a day on Task C and at the same time working 8 hours a day on Task D (an unrealistic 16 hour day), those days no longer overlap, increasing timeline but not budget. Problem # 2 The Training Department at EasyMoney Investment Inc. has been asked to develop a course on "laddering" insured taxable municipal bonds. The department only has the resources available for the project shown in the table below. However, additional personnel can be hired from an agency at a 75% cost premium if needed. We need to identify any resource conflicts in the project. Document the tasks involved, the time frame of the conflict(s), the personnel in conflict, and the number of people involved. Let's say that operations can be split if required. We need to find the least-costly method of resolving the conflict(s), assuming the project duration must not be extended; we need to determine what additional cost, if any, will be incurred. Remember people, here are our primary options: 1) Increase resources (staff or equipment). This usually impacts on the budget. 2) Serialize the conflicted tasks. That is instead of doing two tasks at the same time with the same resources, do one after the other. This usually impacts on the schedule. 3) Split the conflicted task(s) up into multiple pieces to eliminate the conflict. Frequently this is the lowest cost solution in terms of both budget and schedule (if allowed). Our approach should be to: • • • Build a fully populated AIB diagram from the data given Determine if and where there are resource conflicts Determine a resolution honoring the restrictions given. In this case, we can split tasks, we can't extend the schedule, but we can add resources as required but at a hit to the budget (a 75% premium!) DP George Integrated Cost and Schedule Control in Project Management 4 Resource Leveling Using AIB's Tutorial Task A B C D E F Duration 4 Weeks 7 Weeks 5 Weeks 3 Weeks 4 Weeks 3 Weeks Predecessors --A C A D and E Resources (1) Graphic Specialists / $260 day (3) Course Developers / $200 day each (3) Course Developers / $200 day each (2) Tech Writers / $230 day each (1) Graphic Specialists / $260 day (3) Course Reviewers / $300 day The first thing we need to do is create an AIB and find the CP(s). Again, it is not hard to find the only possible resource conflict, since the only resources used multiple times are the Course Developers. We can quickly see we have an issue with Tasks B and C. Task B starts on Week-0 and runs until the start of Week-7 using all 3 course developers. Unfortunately, Task C also uses all 3 course developers and runs from Week4 until the start of Week -9. So we have a resource conflict on weeks 4, 5, and 6. Now, what do we do?! Think about it. We could just add three more course developers for the overlapped period (at a 75% premium over the current cost for a total of 175% of the hourly rate). However, is there another less costly way? Remember our third primary option for resolving resource conflicts? DP George Integrated Cost and Schedule Control in Project Management 5 Resource Leveling Using AIB's Tutorial How about we split Task B (since it's not part of Critical Path) and avoid the conflict all together! There is no standard way to show a split task in an AIB so I just divided Task B into B1 and B2. Now we have no resource conflicts at all. The first part of Task B starts on Week 0 and we stop at the start of Week-4. Task C starts on Week-4 and is complete by the start of Week 9. Our newly created Task B part 2 begins again on Week-9 and is complete by the start of Week 12. No conflict, no extension of the schedule, or impact on the budget. Now let's have that discussion about my annual bonus boss! Or not *sigh* So now it's YOUR TURN. See my optional exercises in Doc Share. Trust me, come quiz and final time you will thank me… DP George Integrated Cost and Schedule Control in Project Management 6 Resource Leveling Using AIB's Non-Graded In Class Exercises In class Non Graded Problem #1 The Training Department at EasyMoney Investment Inc. has been asked to develop an online web based course covering the settlement process for U.S. based equity trades. The department only has the resources available for the project shown in the table below and no other resources are in the budget for this effort. We need to identify any resource conflicts in the project. Document the tasks involved, the time frame of the conflict(s), the personnel in conflict, and the number of people involved. Let's say that operations cannot be split. We need to find the best method of resolving the conflict(s) that extends the schedule as little as possible. Task Duration Predecessors Personnel/Cost A 3 Weeks -- (1) Systems Analyst / $1300 wk each B C D E F 4 Weeks 4 Weeks 5 Weeks 7 Weeks 2 Weeks -A C A B, D ,E (3) Course Developers / $1000 wk each (2) Graphic Specialists / $1300 wk each (2) Tech Writers / $1300 wk each (2) Graphic Specialists / $1300 wk each (3) Course Reviewers / $1500 wk each DP George Integrated Cost and Schedule Control in Project Management 1 Resource Leveling Using AIB's Non-Graded In Class Exercises In class Non-Graded Problem #2 The Training Department at EasyMoney Investment Inc. has been asked to develop an online web-based course covering the accounting process for Credit Default Swaps. The department only has the resources available for the project shown in the table below. However, additional personnel can be hired from an agency at an 80% cost premium if needed. We are firmly committed to the schedule duration and it may not be lengthened. We need to identify any resource conflicts in the project. Document the tasks involved, the time frame of the conflict(s), the personnel in conflict, and the number of people involved. Let's say that operations can be split. We need to find the best method of resolving the conflict(s) that increases the budget as little as possible. Activity A B C D E F Duration 5 Weeks 16 Weeks 2 Weeks 18 Weeks 9 Weeks 10 Weeks Predecessors --A C,E A B, E Personnel / Cost (1) Systems Analyst / $1300 wk each (4) Course Developers / $1000 wk each (2) Course Developers / $1000 wk each (2) Tech Writers / $1300 wk each (2) Graphic Specialists / $1300 wk each (3) Course Reviewers / $1500 wk each *There is a total of 4 Course Developers available DP George Integrated Cost and Schedule Control in Project Management 2 DeVry University Keller Graduate School of Management [name of your project] Earned Value Analysis Essays Submitted in Partial Fulfillment of the Course Requirements for PROJ592 Professor D.P. George By: [place name here] Date: [place date here] Earned Value Analysis Advantages and Challenges Essay [add your 4+ page essay on the challenges of EVA here] 2 References [add your reference list here - two or more] 3 Earned Value Analysis of Your Project Essay [add your 3 + page essay on EVA forecasting statistics and your project results here] 4 References [add your reference list here] 5 Earned Value Forecasting Click on the Slide Show menu item at the top the screen and then on the From Beginning Icon To start slide show THEN - just press the space bar to advance to the next slide or animation DP George Page 1 Earned Value Forecasting So I’m attending the next monthly Senor Manager’s roundtable meeting and the Executive VP of our division asks my collogue Henry “What is the forecast going forward for the American Amalgamated Plant Project Henry?” Henry looks like a deer caught in headlights. He knows better than to say “Oh the costs and schedule should come out okay” or some other vague statement (especially knowing the state of the project now (which is not good) AND remembering my inquisition from our last meeting) , So he just admits it… I did the new EVA process so I can tell you where we are (SPI is .79 and CPI is .72), but I’m not sure how to take those numbers and predict future progress! Everybody expects the boss to explode - but she seems vaguely pleased… Thank you Henry says she, I appreciate your honesty. I know that this process is new here and it will take a bit of practice to get it to down to a routine. Don you have been advocating EVA adoption for a while, why don’t you help Henry and the rest of us out and show us how EVA is used for forecasting. WHAT! How did I get into this mess! My mind is spinning. I’m thinking simultaneously about George’s 5th law of project management (“No good deed goes unpunished”) and that I can’t afford to blow this if I want to see EVA more widely adopted here… So, I turn to Henry and ask him for his current EVA report – I need those numbers to proceed. Then I step up to the white board in the front of the conference room and copy down the following numbers… DP George Page 2 Earned Value Forecasting 1.0 1.1 1.2 1.3 1.4 1.5 Summary Task American Amalgamated Proj Design Foundation Secondary parking structure Exterior Construction Interior Buildout + Equip Bgt Amt at % of Bgt Est. % Completion Time PV AC complete $5,134,000 $2,194,250 $2,409,000 $680,000 100% $680,000 $725,000 100% $525,000 60% $315,000 $389,000 50% $1,599,000 75% $1,199,250 $1,295,000 50% $1,330,000 0% $0 $0 0% $1,000,000 0% $0 $0 0% Bgt Amt at Completion PV AC EV SV CV SPI $5,134,000 $2,194,250 $2,409,000 $1,742,000 ($452,250) ($667,000) EV $1,742,000 $680,000 $262,500 $799,500 $0 $0 CPI 0.79 0.72 With that chore out of the way, I tell the group that the first thing we need to understand is BAC (Budget at Completion). What another acronym! Mike opines from the back of the room. (You can always count on Mike I think to myself). Out loud I say. Yep! Sorry about that people, there are a few more of these we need to get through, but it is worth it trust me. BAC is just your total budget for the effort I tell the group. “In this case that is $5,134,000. What we need however is an updated EAC (Estimate at Completion) which is our calculation of what this thing is actually going to cost given where we are NOW and what lies ahead. It’s our best analysis of the actual project costs numbers at completion.” I hear a groan from where Mike is, but a single look from the boss stopped that in its tracks. However, there are lots of ways to calculate EAC depending on our assessment of the effort to date and our view of the future. I look over at Mike, but as soon as I do he looks down guiltily I don’t think I will be hearing from him again soon! DP George Page 3 Earned Value Forecasting 1.0 1.1 1.2 1.3 1.4 1.5 Summary Task American Amalgamated Proj Design Foundation Secondary parking structure Exterior Construction Interior Buildout + Equip Bgt Amt at % of Bgt Est. % Completion Time PV AC complete $5,134,000 $2,194,250 $2,409,000 $680,000 100% $680,000 $725,000 100% $525,000 60% $315,000 $389,000 50% $1,599,000 75% $1,199,250 $1,295,000 50% $1,330,000 0% $0 $0 0% $1,000,000 0% $0 $0 0% Bgt Amt at Completion PV AC EV SV CV SPI $5,134,000 $2,194,250 $2,409,000 $1,742,000 ($452,250) ($667,000) EV $1,742,000 $680,000 $262,500 $799,500 $0 $0 CPI 0.79 0.72 If we think that the performance we have experienced so far in the project through all the design work, foundation activities, and the work on the secondary parking structure construction is an accurate indicator of the way forward budget wise and we are okay with the current schedule performance then we can calculate our estimate at completion (EAC) as: EAC = BAC / CPI EAC = $5,134,000 / .72 EAC = $7,130,555.55 So the boss says (not looking at me but at the group assembled) “What we are saying with this approach is we anticipate the same cost efficiency going forward as we have seen to date, so that efficiency (.72) applied to our base budget get’s us to a new estimated cost of $7.1Million. Since we have already spent 2.4 Million that leaves around 4.7 million of additional commitment. Yes ! (I say seizing the moment.) The ETC (estimate to complete) is just EAC - AC in this case it’s $7,099,773.82 – $2,409,000 or $4,721,555.55 DP George Page 4 Earned Value Forecasting Bgt Amt at Completion PV AC EV SV CV SPI $5,134,000 $2,194,250 $2,409,000 $1,742,000 ($452,250) ($667,000) CPI 0.79 0.72 Moving forward while I have their complete attention, I say…If we think that the performance we have experienced so far in the project through all the design work, foundation activities, and the work on the secondary parking structure construction is NOT an accurate indicator of the way forward. If we think that things will quickly return to our original plan budget wise now that the debacle of the parking structure snafu behind us… We can calculate our EAC as: EAC = AC + (BAC – EV) EAC = $2,409,000 + ($5,134,000 – $1,742,000) EAC = $2,409,000 + $3,392,000 EAC = $5,801,000 The boss tells the group (continuing her role as chief explainer…) “What we are saying with THIS approach is we first calculate what we have left to spend. We calculate that by taking our entire budget (the BAC) and subtract from it the budgeted spend for the estimated actual progress to date (our EV). The reminder being what we have left to spend on this effort from our original budget. We add that to what we have actually spent to date (our AC) and the total is our new estimate as completion EAC. Well said (I thought but did not say…) What I did say (while writing furiously on the white board) was … Yes, and doing it this way we see an Estimate to Complete (ETC) of EAC - AC or $5,801,000 - $2,409,000 = $3,392,000. This in comparison to the 4.6 million for our first calculation. But there are a couple of other scenarios we need to examine… DP George Page 5 Earned Value Forecasting Bgt Amt at Completion PV AC EV SV CV SPI $5,134,000 $2,194,250 $2,409,000 $1,742,000 ($452,250) ($667,000) CPI 0.79 0.72 If we think that the performance we have experienced so far in the project has shown our original estimates to be grossly out of line with current building costs and code requirements (we always knew that using the original plant build costs from 12 years ago was a problematic approach)… We should calculate our EAC as: EAC = AC + Bottom up estimate to completion “I figured we would get here sooner or later” the boss opined. “What we are saying with THIS approach is we need to stop and re-estimate all the REMAINING detail tasks, then sum them up to get a new estimate of future costs and then ADD them to what we have spent so far to get a brand new EAC.” Well.. In truth we never really estimated the detailed costs in the first place” I reminded the group. We mostly took the total from the original build multiplied it by an inflation factor and ALLOCATED the cost downward… Probably NOT my best move here. Reminding people “the emperor has no clothes” does NOT make you a popular In any case, if this is our best assessment of the facts on the ground at this point, then Henry needs to get with his people and re-estimate, then get back to us with his new EAC. guy so I moved rapidly on… “Wait..” Says Henry – looking a bit pale. “Didn’t you say there was one more approach we should consider?” Right you are Henry, the boss and I say simultaneously (which got a chuckle from the group – which was badly needed about then) DP George Page 6 Earned Value Forecasting The last one goes like this (I tell the group) If we think both the schedule performance and budget performance are accurately telling us what is happening, then re-estimation is just going to confirm that fact and waste more time, money, and effort to add to the problem. If we can’t move the completion date (and we can all agree that is something we REALLY need to avoid) then we can use what we know to be case (our current efficiencies) and project them through until the end). If we do that then our EAC is calculated as: EAC = AC + {(BAC - EV)/(CPI x SPI)} “You left out the phases of the moon! Mike spat out from the back of the room. That looks like alphabet soup! Look I manage a production operation I’m not a statistician!” I knew Mike couldn’t stay quiet forever, I told him --- Wait Mike, let me explain this formula. You guys can follow this stuff just fine! We just need to take it one step at a time. First of all we have AC. That is just our actual costs to date in the project – right? Right! To that we add our budget adjusted for how much we have used up for the progress we have made so far. That is just BAC – EV as we have seen in earlier versions of EAC calculations. Yes?! But if we JUST did that we would NOT have adjusted from our original budget assumptions to what we are finding on the ground in terms of budget expense and schedule progress. To do THAT we need to adjust the (BAC – EV) by how efficient we our with our budget AND our schedule which is the product of CPI and SPI. “So it goes like this…” DP George Page 7 Earned Value Forecasting Bgt Amt at Completion PV AC EV SV CV SPI $5,134,000 $2,194,250 $2,409,000 $1,742,000 ($452,250) ($667,000) CPI 0.79 0.72 EAC = AC + {(BAC - EV)/(CPI x SPI)} EAC = $2,409,000 + {($5,134,000 - $1,742,000) / (CPI x SPI)} EAC = $2,409,000 + {($5,134,000 - $1,742,000) / (.72 x .79)} EAC = $2,409,000 + ($3,392,000 / .57) At this point $2,409,000 is how much we have actually spent so far. Our AC. $3,392,000 is how much of our budget we have left to use BAC - EV .57 is our combined schedule and budget efficiency. It is the rate we have been progressing in the schedule and using up the budget CPI x SPI When we apply that combined efficiency rate (by dividing the rate into the remainder of our budget) we get a projected budget of $5,908,570.87 If we then add THAT to our cost so far we get… EAC = $8,317,570.87 or around $8,318,000 EAC = $2,409,000 + $5,908,570.87 “So in this last version” the boss summarized. “We have a total cost of 8.3 Million gives us an estimated cost to complete this effort of what?... About 6 Million. Correct?! YES I reply! (boy am I glad she seems to be on my side!) the number is actually EAC - AC = $8,317,570.87 - $2,409,000 = $5,908,570.87. To summarize our options I say (turning and pointing to a list I’ve been maintaining on the side) Here are our choices… DP George Page 8 Earned Value Forecasting Equation 1 EAC = (BAC/CPI) EAC = $5,134,000 / .72 $7,099,773.82 = $5,134,000 / .72 EAC = $7,099,773.82 or around $7,100,000 ETC = EAC – AC = $4,690,773.82 or around $4,691,000 2 EAC = AC + (BAC – EV) EAC = $2,409,000 + ($5,134,000 – $1,742,000) EAC = $2,409,000 + $3,392,000 EAC = $5,801,000 ETC = EAC – AC = $3,392,000. 3 EAC = AC + Bottom up estimate to completion EAC = $2,409,000 + Bottom up estimate to completion 4 EAC = AC + {(BAC - EV)/(CPI x SPI)} EAC = $2,409,000 + {($5,134,000 - $1,742,000) / (CPI x SPI)} EAC = $2,409,000 + {($5,134,000 - $1,742,000) / (.72 x .79)} EAC = $2,409,000 + ($3,392,000 / .57) EAC = $2,409,000 + $5,908,570.87 EAC = $8,317,570.87 or around $8,317,600 ETC = EAC – AC = $5,908,570.87. or around $5,909,000 When to use Cost performance won't change, so we will modify the budget to accommodate using the CPI as a modifying factor. Applying it to the remainder of the project assumes we will continue at the same rate of cost efficiency. (PMBOK Guide 5th Ed, 2013, pg 220) Our project is experiencing variances and indexes that may not be what was expected. However, you believe these atypical variances are not going to continue and that the project performance will likely improve. future spending will be at the original, planned spending th rate. (PMBOK Guide 5 Ed, 2013, pg 220) Our estimations were fundamentally flawed. Thus, the indexes we created during project planning are of little use in predicting future costs for the project. This requires an entire re-estimation of project costs to completion. (PMBOK Guide 5th Ed, 2013, pg 221) Cost performance and schedule performance won't change ,and we can't move the date; we will increase the budget if needed. We think the CPI th and SPI are predictive going forward. . (PMBOK Guide 5 Ed, 2013, pg 221 “Choices? Choices! Did you say we have a choice here Don? We don’t get to choose! Only one of these scenarios most closely matches the facts at hand” the boss said with her accustomed passion. DARN, I thought I had got through this without being raked over the coals! *sigh* “Your right of course – bad choice of words as it were.” I said before anyone else could pile on. So people, which of these scenarios is the most correct do we think? SILENCE man you could hear a pin drop!! DP George Page 9 Earned Value Forecasting Equation 1 EAC = (BAC/CPI) EAC = $5,134,000 / .72 $7,099,773.82 = $5,134,000 / .72 EAC = $7,099,773.82 or around $7,100,000 ETC = EAC – AC = $4,690,773.82 or around $4,691,000 2 EAC = AC + (BAC – EV) EAC = $2,409,000 + ($5,134,000 – $1,742,000) EAC = $2,409,000 + $3,392,000 EAC = $5,801,000 ETC = EAC – AC = $3,392,000. 3 EAC = AC + Bottom up estimate to completion EAC = $2,409,000 + Bottom up estimate to completion 4 EAC = AC + {(BAC - EV)/(CPI x SPI)} EAC = $2,409,000 + {($5,134,000 - $1,742,000) / (CPI x SPI)} EAC = $2,409,000 + {($5,134,000 - $1,742,000) / (.72 x .79)} EAC = $2,409,000 + ($3,392,000 / .57) EAC = $2,409,000 + $5,908,570.87 EAC = $8,317,570.87 or around $8,317,600 ETC = EAC – AC = $5,908,570.87. or around $5,909,000 When to use Cost performance won't change, so we will modify the budget to accommodate using the CPI as a modifying factor. Applying it to the remainder of the project assumes we will continue at the same rate of cost efficiency. (PMBOK Guide 5th Ed, 2013, pg 220) Our project is experiencing variances and indexes that may not be what was expected. However, you believe these atypical variances are not going to continue and that the project performance will likely improve. future spending will be at the original, planned spending th rate. (PMBOK Guide 5 Ed, 2013, pg 220) Our estimations were fundamentally flawed. Thus, the indexes we created during project planning are of little use in predicting future costs for the project. This requires an entire re-estimation of project costs to completion. (PMBOK Guide 5th Ed, 2013, pg 221) Cost performance and schedule performance won't change ,and we can't move the date; we will increase the budget if needed. We think the CPI th and SPI are predictive going forward. . (PMBOK Guide 5 Ed, 2013, pg 221 “Okay staff that was probably an unfair question” the boss finally chipped in. “Henry this is your problem” The boss said staring at the increasingly uncomfortable Senior Manager. “By the next roundtable meeting I need a formal fact based presentation as to what model you plan to use and WHY!” “You bet” Henry replied (with more fervor than I think he was really feeling). He will be okay I’m thinking, he really is a talented guy with a real challenge for a project! Okay people, our time has run out – see most of you later for the EPIC demo” Here we go again. I’m out of the kettle and into the fire! *sigh* DP George Page 10 Week 6 EVA Forecasting in-class Exercise Problem We have been using EVA for the Acme project from the beginning. Here is the status of the effort to date: Task Phase 1 Phase 2 Phase 3 Acme Project % of Schedule 100% 75% 10% % Complete 100% 60% 5% Budgeted Amount $500,000 $1,675,000 $3,100,000 $5,275,000 Cost to Date $678,950 $1,435,663 $321,120 $2,435,733 As can be seen, these phases overlap. Phase 1 is completed. However, Phase 2 and 3 or in execution. 75% of the scheduled time has passed for Phase 2, but it is an estimated 60% complete. Phase 3 has just begun with only 10% of its schedule passed and an estimated 5% complete. QUESTION #1 What are the AC, PV, EV, SV, SPI, and CPI values for the Acme project as of the last reporting period (meaning now)? Question #2 What is are the EAC and ETC values IF: a) We assume performance won't change, so we will modify the budget to accommodate using the CPI as a modifying factor. Applying it to the remainder of the project assumes we will continue at the same rate of cost efficiency. b) We assume our project is experiencing atypical variances that is NOT going to continue and that the project performance will likely improve. Future spending will be at the original, planned spending rate. c) We assume we can't move the date; we will increase the budget if needed. We think the CPI and SPI are predictive going forward. D.P. George 1
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Explanation & Answer

Attached.

Resource Leveling Using AIB's Non-Graded In Class Exercises
Student’s Name
Professor’s Name
Course
Date
In class Non-Graded Problem #1
The Training Department at EasyMoney Investment Inc. has been asked to develop an online
web based course covering the settlement process for U.S. based equity trades. The department
only has the resources available for the project shown in the table below and no other resources
are in the budget for this effort.
We need to identify any resource conflicts in the project. Document the tasks involved, the time
frame of the conflict(s), the personnel in conflict, and the number of people involved.
Let's say that operations cannot be split. We need to find the best method of resolving the
conflict(s) that extends the schedule as little as possible.

Task

Duration

Predecessors

Personnel/Cost

A

3 Weeks

--

(1) Systems Analyst / $1300 wk each

B
C
D
E
F

4 Weeks
4 Weeks
5 Weeks
7 Weeks
2 Weeks

-A
C
A
B, D ,E

(3) Course Developers / $1000 wk each
(2) Graphic Specialists / $1300 wk each
(2) Tech Writers / $1300 wk each
(2) Graphic Specialists / $1300 wk each
(3) Course Reviewers / $1500 wk each

Inference
In the venture scenario, the resource conflicts are in task C and E, with the resources Graphic
Specialists. The duration of conflict in the project would be in week 4, 5, 6, and 7. Besides, the
conflict involves 2 personnel in the project plan.

DP George Integrated Cost and Schedule Control in Project Management

1

Resource Leveling Using AIB's Non-Graded In Class Exercises
In class Non-Graded Problem #2
The Training Department at EasyMoney Investment Inc. has been asked to develop an online
web-based course covering the accounting process for Credit Default Swaps. The department
only has the resources available for the project shown in the table below. However, additional
personnel can be hired from an agency at an 80% cost premium if needed. We are firmly
committed to the schedule duration and it may not be lengthened.
We need to identify any resource conflicts in the project. Document the tasks involved, the time
frame of the conflict(s), the personnel in conflict, and the number of people involved.
Let's say that operations can be split. We need to find the best method of resolving the conflict(s)
that increases the budget as little as possible.

Activity

Duration
Predecessors
Personnel / Cost
A
5 Weeks
-(1) Systems Analyst / $1300 wk each
B
16 Weeks
-(4) Course Developers / $1000 wk each
C
2 Weeks
A
(2) Course Developers / $1000 wk each
D
18 Weeks
C, E
(2) Tech Writers / $1300 wk each
E
9 Weeks
A
(2) Graphic Specialists / $1300 wk each
F
10 Weeks
B, E
(3) Course Reviewers / $1500 wk each
*There is a total of 4 Course Developers available
Discussion
In the project scenario, we have course developers as the resource conflict at tasks B and C. The
period of the conflict includes week 6 and week 7 of the project execution. In addition, the
personnel in the resource conflict are 2 with 4 people involved.

DP George Integrated Cost and Schedule Control in Project Management

2


Week 6 EVA Forecasting in-class Exercise Problem
Student’s Name
Professor’s Name
Course
Date
We have been using EVA for the Acme project from the beginning. Here is the status of
the effort to date:
Task
Phase 1
Phase 2
Phase 3
Acme Project

% of
Schedule
100%
75%
10%

% Complete
100%
60%
5%

Budgeted
Amount
$500,000
$1,675,000
$3,100,000
$5,275,000

Cost to Date
$678,950
$1,435,663
$321,120
$2,435,733

As can be seen, these phases overlap. Phase 1 is completed. However, Phase 2 and 3 or in
execution. 75% of the scheduled time has pa...


Anonymous
I was having a hard time with this subject, and this was a great help.

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