I’ve attempted question 7 from Mock Exam Paper A from your book (Q: Consider the chart below and make some calculations and comments). Could I ask you to have a look and see if you think the calculations are correct and whether the comments give enough info for the full 50 marks, or if I? should be adding a bit more?
Question Details :
AC = 480,000
PC = 390,000
EV = 320,000
OD = 20m
BAC = 1,000,000
Comment on SV (or SPI), CV (or CPI), Estimated Cost + estimated time at completion.
My Calculations :
CV = EV – AC = 320,000 – 480,000 = -160,000
SV = EV – PC = 320,000 – 390,000 = -70,000
CPI = Ev/AC = 320,000 / 480,000 = 0.66
SPI = EV / PC = 320,000 / 390,000 = 0.82
EAC = BAC/CPI = 1,000,000 / 0.66 = £1.52M
ETC = OD/SPI = 20 / 0.821 = 24.36m
From the calculations, the following can be observed :
1. CV is negative which indicates that the project has spent £160k of actual money more than the value of work received.
2. SV is negative which indicates that the project has achieved £70K less work than was actually expected at month 10. In addition, the project has spent £90k of actual money more than was planned at month 10.
3. The estimate at completion places the finished costs at £1.52M which is 50% increase above the original estimate, if the current rate of work and spend is maintained.
4. The estimated time of completion is 24.36 months which is a 20% increase over the original estimate.
5. Overall the project has been under performing since month 3, consistantly received less value than planned and that which has been received has cost more than estimated. Looking at the graph, the estimated costs are increasing diverging from the planned costs which tend to indicate the situation will continue to get worse. There are a variety of reasons for the situation arising, possibly caused by bad estimates, ineffectual resouces or lack of direction.
Any comments you have would be much appreciated,