Advanced Engineering Project Management - Earned Value Management and Revised Project Plan

Running head: ADVANCED ENGINEERING PROJECT MANAGEMENT
Advanced Engineering Project Management
Name of the Student
Name of the University
Author’s note

1ADVANCED ENGINEERING PROJECT MANAGEMENT
Table of Contents
1. Earned Value Management....................................................................................................2
1.a. Project 1...........................................................................................................................2
1.b. Project 2..........................................................................................................................2
1.c. Comparing Project 1 and Project 2..................................................................................3
1.d. Earned Value Management as a useful tool....................................................................4
2.a. Developing Revised Project Plan........................................................................................6
2.1. Fulton Hogan Pty Ltd and Auburn Stadium Revised Construction....................................6
2.2. Revised Project Charter.......................................................................................................7
2.3. Auburn Stadium Construction Project Plan......................................................................10
Project integration management...........................................................................................10
Project scope management...................................................................................................11
Project schedule management..............................................................................................12
Project cost management......................................................................................................16
Project quality management.................................................................................................18
Project resource management..............................................................................................19
Project communications management..................................................................................19
Project procurement management........................................................................................20
2.b. Report to Project Sponsor.................................................................................................20
3. References............................................................................................................................22

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1. Earned Value Management
1.a. Project 1
Earned Value (EV) = BAC x Percentage of Work Completed = $2,100,000 x 26% =
$5,46,000
Cost Variance (CV) = EV – AC = $5,46,000 - $6,50,000 = - $1,04,000
Schedule variance (SV) = EV – PV = $5,46,000 - $6,00,000 = - $54,000
Cost Performance Index (CPI) = EV / AC = $5,46,000 / $6,50,000 = 0.84
Schedule Performance Index (SPI) = EV / PC = $5,46,000 / $6,00,000 = 0.91
EAC = BAC / CPI = $2,100,000 / 0.84 = $2,500,000
EAC = AC + (BAC – EV) = $6,50,000 + ($2,100,000 - $5,46,000) = $2,204,000
EAC = AC + [(BAC – EV) / (CPI x SPI)] = $6,50,000 + ($15,54,000 / 0.7644) =
$2,682,967.032
1.b. Project 2
Earned Value (EV) = BAC x Percentage of Work Completed = $2,100,000 x 38% =
$7,98,000
Cost Variance (CV) = EV – AC = $7,98,000 - $6,50,000 = $1,48,000
Schedule variance (SV) = EV – PV = $7,98,000- $6,00,000 = $1,98,000
Cost Performance Index (CPI) = EV / AC = $7,98,000 / $6,50,000 = 1.227 = 1.28
Schedule Performance Index (SPI) = EV / PC = $7,98,000 / $6,00,000 = 1.33
EAC = BAC / CPI = $2,100,000 / 1.28 = $1,640,625

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EAC = AC + (BAC – EV) = $6,50,000 + ($2,100,000 - $7,98,000) = $1,952,000
EAC = AC + [(BAC – EV) / (CPI x SPI)] = $6,50,000 + ($13,02,000 / 1.7024) =
$1,414,802.631
1.c. Comparing Project 1 and Project 2
In Project 1, the Cost Variance (CV) is - $1,04,000. Since, the CV is less than 0,
Project 1 is over budget. In Project 2, the Cost Variance (CV) is $1,48,000. Since, the CV is
greater than 0, Project 2 is under budget.
In Project 1, the Cost Performance Index (CPI) is 0.84. Since the CPI is less than 1;
Project 1 is over budget. In Project 2, the Cost Performance Index (CPI) is 1.28. Since the
CPI is greater than 1; Project 2 is under budget.
In Project 1, the Schedule Variance (SV) is - $54,000. Since the SV is less than 0;
Project 1 is behind schedule. In Project 2, the Schedule Variance (SV) is $1,98,000. Since the
SV is greater than 0; Project 2 is ahead of schedule.
In Project 1, the Schedule Performance Index (SPI) is 0.91. Since the SPI is less than
1; Project 1 is behind schedule. In Project 2, the Schedule Performance Index (SPI) is 1.33.
Since the SPI is greater than 1; Project 2 is ahead of schedule.
In Project 1, EAC is $2,500,000, $2,204,000 and $2,682,967.032 respectively. In
Project 2, EAC is $2,500,000, $2,204,000 and $2,682,967.032.
Therefore, considering the project performance, it can be concluded that the Project 1
is over budget and is running behind schedule whereas the Project 2 is under budget and is
running ahead of schedule.

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1.d. Earned Value Management as a useful tool
There are several limitations of earned Value Project that can be observed while
conducting a project. The limitations associated with the project are-
i. The Earned value management only monitors that the project is on time or not. The project
manager checks whether a particular work is being completed within the stipulated time or
budget or not. However, the quality of the project cannot be detected while the project is in
progress. The quality of the project can only be measured only after the entire project gets
completed.
Thus, the quality of the project can be addressed at the time of hand over. If the client
is not satisfied or the project fails, then it can be concluded that the project manager and the
associated stakeholders of the project have not worked well. In the other scenario, if the
project becomes successful, then it can be concluded that the project manager and the
stakeholders have done the work efficiently.
ii. If the employees are trained in Earned Value Management, confusions will arise among
those employees to choose the best mathematical formula. Some employees can suggest
using a different mathematical formula while some other employees can suggest using a
different project track. Some Earned value Management formula represents project actual
budget and the completion, while another formula represents the cost variance and the
estimate of project completion. Moreover, the earned value management cannot be used on a
continuous basis on a particular project. The Earned Value Management is applicable to
smaller projects and simple projects. Earned Value Management also does not specify what is
exactly needed for the project to achieve a definite functionality.

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Confusions and conflictions among the stakeholders can be addressed at the time of
the execution of the project. It is the responsibility of the project manager to prepare a project
plan early and must take approval from the stakeholders. Otherwise confusions will arise.
iii. In an enterprise all the employees are not trained in Earned Value Management, Thus
Earned Value Management is out of scope for certain employees or stakeholders. The
stakeholders require appropriate training so that they can use the Earned Value Management
effectively otherwise the project will fail. The project stakeholders understand the charts and
not the complex mathematical formula. The stakeholders expect the project manager to
explain the project plan in charts and simple steps. In this way, they can acknowledge the
project deliverables.
Thus, the communication between the project manager and the stakeholders must be
smooth and straightforward, and the stakeholders should understand the project deliverables.
The stakeholders like the simple graphs and chart and not the complicated mathematical
formula, the limitation can be addressed while the project manager explains the project plan
and the budget figures to the stakeholders.
iv. There are issues related to CPI calculation and SPI calculation. CPI remains same for the
entire project until and unless AC or EV changes in a significant way. CPI depends on the
AC for the accuracy. CPI will give inappropriate value if AC excludes all the appropriate
costs and the payments. Again, the SPI can give unreliable value if any ahead-of-schedule
noncritical task outweighs any behind-of-schedule critical task.
The issues related to CPI and SPI can be addressed at the time of the project
execution. The stakeholders can acknowledge thee issues.