Wired Cafe Project: Exercise 4 - Cost, Schedule, and Performance

This project management assignment analyzes the "Wired Cafe" case study, addressing various project management aspects. It begins with a requirements document outlining project goals, context, and success criteria. It then calculates cost and schedule variances, identifying root causes and planned responses. The assignment proceeds to estimate Estimation at Completion (EAC), Estimate to Completion (ETC), and the To Complete Performance Index (TCPI). A change request form is completed to address potential modifications. Finally, an ROI analysis is performed, including specific actions to maximize returns. The assignment covers key concepts such as cost/schedule variance, performance indices, and risk management within the context of a real-world project scenario.

Name of student:
Institutional Affiliations:

Exercise 4
Exercise 4.1: Requirements Document
 Using the Wired Café Case Study , create a requirements document
Goals
The main aim of the project is to ensure that students can engage freely in a relaxing
environment with internet connection. It provides a safe place for the students to deck their
laptops while and such, have the available information for proper discussions. It streamlines
the operation of the school by providing a place where students might manage discussions
during the school calendar. In such regards, the vision is to ensure a platform that might
enforce cooperation, discussions and improving students’ awareness of the importance of
learning.
Context
There has been an increasing urge to develop an area where students can engage with
each other in discussions while at the same time having the required internet connection.
This has been mainly aired out by the students and in essence, it is high time to develop
such an environment.
Combining the proficiency of IT directors and project manager, various sites have been
established for the purpose of the project. However, it has been established that the most
suitable location is the closed-down book store. It requires major renovations to ensure both
the technological and other infrastructural requirements are in place.
Requirements
 Internet connection and infrastructure.
 Furniture for laptop decking.
 Technological tutoring
 Area for food storage.
 A coffee bar serving non-alcoholic beverages and soda.
 Comfortable chairs and desks.
 An eating area.
 Outlets that are will be used to recharge all the electronic devices including laptops
and phones
The success criteria
Success will be measured in terms of how engaging the environment of the new
facility will become. Proper internet connectivity as well as the how the facility
operates will be vital metrics in success measurement.
More to this regards the compatibility of the selected location for the technological as
well as facility requirements of the students. No interruptions in terms of power and
internet connection, as such, will be essential in understanding the success of the
wired café.

Exercise 4.3: Calculate Variances and Indexes
 Using the Wired Café Case Study, calculate variances and indexes
Cost variance
Planned result Actual Result variance
$250,000 $275,000 or $225,000 $25,000
Root Cause
The change in cost requirements of the project may be brought about by changes in
material specifications, technological requirements and even the facility space. These
factors may either decrease or increase the overall costs of the project. It may also involve
inflation in the cost of the facility requirements.
Planned response
The budgetary allocation caters for any variance. It has been noted that the project manager
is allowed a cost variance of 10% and anything greater than this will need the approval of
the project sponsor. That being the case, it is clear that there is a contingency plan to cater
for cost variance.
Schedule variance
Planned result Actual Result variance
8 months 12 months 4 months
Root Cause
As per the project documents, the project is supposed to take eight months. However, this
schedule has not catered for various aspects of the project such as delivery of materials,
finishes and installations. That being the case, it is vital to understand that these changes
may affect the overall period of completion by a couple of months. The four months variance
is supposed to ensure that the project is completed.
Planned response
There is a need to ensure that all the aspects of the project including the material
specifications and the installations are delivered within the shortest timeframe. The
procurement measures in place and timely request of materials form an important
benchmark of timely completion.

Exercise 4.4: EAC and ETC
 Using the Wired Café Case Study, calculate EAC and ETC.
Estimation at Completion (EAC)
The budget at completion is $275,000- This takes into context the 10% allowable deviation
of the project cost.
The Actual cost of the Project=$250,000
The Earned value of the project is estimated as; the percentage of work that has been
completed X the budget at completion (Fleming & Koppelman, 2009).
In this case, taking that 50%of the work has been completed, EV=50%x275, 000=$137500
The CPI=137500/250,000=0.55
However, based on the fact that EAC=BAC/CPI, it is vital to estimate the cost performance
index.
Therefore, EAC=275,000/0.55=$500,000
Estimate to completion (ETC)
The MV of work that may remain as per the EAC=BAC-EV
275,000-137,500=137500
Therefore, the TAC may be estimated as MV/CPI
137500/0.55=$250,000
Exercise 4.5: Complete Performance Index (TCPI)
 Using the Wired Café Case Study, calculate To Complete Performance Index (TCPI)
The TCPI is calculated by the following formula:
BAC-EV/ the funds that remain (Project Management Institute, 2017)
The BAC=$275,000
The EV=137,500

The remaining funds=250,000-137,500=112,500
Therefore, the TCPI= (275,000-137,500)/112,500=1.22
Exercise 4.6: Change Request Form
 Using the Wired Café Case Study, complete a Change Request form
Requirements Increase Decrease Modify
Description: The facility is a pilot project and as such, depending on the student’s
specifications, there might be a need to modify the initial plans that surround the general
facility infrastructure.
Cost Increase Decrease Modify
Description: the cost of the project will increase with the changes and modifications to the
current infrastructure. The cost implications are associated with the changes and upgrades
in the technology as well as the furniture.
Schedule Increase Decrease Modify
Description: The current schedule does not cater for the changes. In such regards, there will
be modification to cater for the changes in infrastructure and technology
Stakeholder Impacts High risk Low risk Medium risk
Description: the project sponsor will have to be notified on the changes in the cost
requirements of the project.
The students, on the other hand, will be affected by the change in the schedule and the
overall completion time.
Comments: The specified changes will be implemented after a board discussion. All the
stakeholders will have a role to play in each of the changes. However, these are medium
risk changes that will not affect the overall objective of the project. The aim is to ensure that
the facility can accommodate as many students as possible and to ensure that the
educational objectives are achieved.

Exercise 4.7: Current Status and Goal Percentage
 At your company, what would be your ROI Level be? Fill in the current status and goal
percentage. Write a handful of specific actions.
The total expenditure on the project=$275,000
Assuming that the gains from the project are $300,000
The ROI $50,000
Therefore, this is (50,000/275,000) x100=18.18%
Actions
 One of the most important measures to ensure that there is adequate return on
investment is to ensure that the facility running costs are very low. The project is
supposed to provide significant savings on the internet and group discussions and
as such, maintaining low overhead costs will offset the initial project costs by a good
margin.
 There may be need to ensure that the initial costs are at a minimum. This may mean
that the project manager and the IT director will have to procure the most
appropriate materials at the lowest cost. Scope creep and other impediments to
project completion will need to be properly managed throughout the project. Risks
associated with scope creep have a great effect on the overall budget and may lead
to cost overruns. The procurement process, in such regards, need to be streamlined
as per the project returns. It will ensure that there is an effective methodology in
project completion and delivery.
 The economies of scale will have to be utilized in the design of the facility. There is a
need to ensure that the facility accommodates a large number of students.
Accessibility to internet and the availability of laptop and computer desks need to be
utilized as per the requirements of the students. The long run of the project has to be
viable and ensure that there is enough spaces for all the students to access
information.

References
Fleming, Q. W., & Koppelman, J. M. (2009). The Two Most Useful Earned Value Metrics: the CPI and
the TCPI. PM WORLD TODAY , 11 (6), 1-9.
Project Management Institute. (2017). A Guide to the Project Mangement Body of Knowledge(PMBOK
Guide). Newtown Square, Pennsylvania : Project Management Institute.