Project Cost Variance Analysis

This assignment presents data on the MDC project, including actual costs to date, earned value to date, cost variance, and Cost Performance Index (CPI). It requires an analysis of this information to determine the project's current performance against budget. The assignment emphasizes understanding earned value management principles and applying them to real-world project data. A summary concluding on the project's status and likelihood of completion within budget is also expected.

PPMP20007
Assessment Item 2 Coversheet
Group Members:
Student Name: Student Id:
Student Name: Student Id:
Student Name: Student Id:
Student Name: Student Id:

Table of Contents
Part A - Developing the schedule....................................................................................................3
Answer to Question 1..................................................................................................................3
Answer to Question 2..................................................................................................................3
Answer to Question 3..................................................................................................................3
Answer to Question 4..................................................................................................................5
Answer to Question 5..................................................................................................................7
Part B – Modifying the schedule.....................................................................................................8
Answer to Question 1..................................................................................................................8
Answer to Question 2..................................................................................................................9
Answer to Question 3..................................................................................................................9
Part C – Tracking Progress............................................................................................................10
Answer to Question 1................................................................................................................10
Answer to Question 2................................................................................................................10
Bibliography..................................................................................................................................15

Part A - Developing the schedule
Answer to Question 1
Answer to Question 2
i. a. Duration of task 2.10 and 2.11
The new duration of task 2.10 and 2.11 has become 2 weeks. The overall duration of the project
is same as the addition of resources have decreased the duration of those particular tasks only.
The overall impact on the project duration is none as all over project durations remained for 148
days only from Mon 05-02-18 to Tue 04-09-18. It is because the tasks 2.10 and 2.11 are not one
of the critical tasks and hence, the change in their duration has not affected the overall project
duration
i. b. Reduction in duration of some tasks
The tasks (2.4 and 2.9) can be reduced for completing the project the project 10 days earlier.
Both the tasks have to be reduced by 1 week to complete the project 10 days earlier than the
present duration. The tasks are carried out by Software Engineer and there is only resource is
allocated for the tasks so the duration of those tasks can be easily reduced by allocating
additional resource.
Answer to Question 3
i. Solving the issue of resource over allocation
The over-allocated tasks in the previous project file of AQ2.mpp were:
WBS Task Name WBS Duration Start Finish Predecessors
PartAQ1.mpp
PartAQ2.mpp

Predecessor
s
2.9 2.9 Software development 2.8 6 wks Fri 23-03-
18
Tue 08-05-
18 28
2.10 2.10 User interface
development 2.8 2 wks Fri 23-03-
18
Mon 09-04-
18 28
2.11 2.11 Database
development 2.8 2 wks Fri 23-03-
18
Mon 09-04-
18 28
7.1 documentation plan 2.8 1 wk Fri 23-03-
18
Thu 29-03-
18 28
The resource over allocation is resolved by following the steps as mentioned below:
1. Go to  Resource Tab
2. Now click on  Levelling options in the “Level” ribbon which opens a pop-up window as
below:

3. Then click on  “Level All”
4. Now levelling of resources is completed.
ii. Impact on overall project duration and end date
The overall project duration has increased from 148 days to 149 days that means the project is
will require additional 1 days to complete. The resource over allocation has been resolved by
levelling only within the available slack which means that that no additional resource has been
added to the schedule. Hence, the project duration has increased by 01 day means that it will
complete on Wed 05-09-18 assuming it starts on Mon 05-02-18.
Answer to Question 4
MEMO
Synthesys Informatics
To: Ms. Horsell (Director of Marketing and Portfolio Management)

Cc:
From: <<name of the student>> (Project Manager)
Subject: Conveying the Project Completion date along with justification of time required and the
overall cost expense required in the project
Date: 23rd December, 2017
Introduction: The memo has been made for providing the expected project duration and the
completion of the project of The MDC Project. It would also provide an explanation of the time
required for the activities of the project. The memo would also provide some recommendations
for managing the project schedule as required. The final section of the memo would provide cost
estimation for the labour resources utilized for the project completion.
i. The expected completion date of the project (assuming it started on 5th February, 2018) is
Wednesday 05 September 2018. The duration of the project is 149 days.
ii. The Software development, activities related to electronics, activities related to mechanics,
and prototype I and II build up took collectively 50 days resulting in 149 days for the completion
of the project.
Since the number of the days are 149 for the completion of the project, the number of days can
be reduced by,
 Increasing the number of resources used in the project
 Decreasing the critical task durations for decreasing the project duration
iii. The estimated direct labour costs for the project is presented as below:
Resource Cost
Planning workshop $8,720.00
Electronics $35,200.00
Software $162,160.00
Mechanics $37,400.00

Verification $29,000.00
Prototype 1 build $10,080.00
Prototype 2 build $10,080.00
Documentation $18,800.00
Production of devices $21,000.00
Total project cost $332,440.00
Close: Please send me your feedback and comments by 6th January, 2018, so that any required
changes in the plan can be done before initiation of the project on 5th February, 2018.
Kind Regards,
<name of the student>
Project Manager
Answer to Question 5
The project can be completed successfully in the estimated time and budget by following the
mentioned steps,
i. Project Details Finalization
ii. Clear Expectations are set from the start
iii. Right team and system are selected
iv. Milestones are defined properly
v. Evaluation of the project and implementation of the Project Management Principles

Part B – Modifying the schedule
Answer to Question 1
Overall Duration of the project: 138 days (it reduced from 149 days to 138 days i.e. one day)
End Date of the project: 21/08/2018
Direct Labour Costs for the project: $330,200
PartB.mpp

Answer to Question 2
Change Impact on Project
duration (Longer /
Shorter / No Impact
By how much Explanation
Adding 1 EE and 1
ME to prototype build
1&2
Shorter 1 day
Allocation of new resources the
work overload reduced to 2 days
Change in duration of
5.1
No impact Unchanged in terms of
duration
This happened as the resources
work per day is same. This
means the amount of work has
increased but the working
duration of resources is same.
Change in duration of
4.7
No impact Unchanged in terms of
duration
This has happened as the
resources work per day is same.
This means the amount of work
has increased but the working
duration of resources is same.
Answer to Question 3
Change Impact on Direct
Labour Costs
(More / Less / No
Impact
By how much Explanation
Adding 1 EE and 1 ME to
prototype build 1&2
More $4,426.67 Added two resources to both
prototype build 1 & 2
Change in duration of 5.1 No impact Unchanged in terms
of Cost
No resources has been added
Change in duration of 4.7 No impact Unchanged in terms
of cost
No resources has been added

Part C – Tracking Progress
Answer to Question 1
The baseline has been set for the project by following the steps as below:
 Click Project > Set Baseline > Set Baseline.
 The baseline has been selected.
 Click entire project for updating the status of tasks.
Answer to Question 2
a. Status date
The status date for the project is chosen to be 25 May 2018 and according to that the project is
completed 9%.

b. Status data

c. Project Status Report
Project Name: The MDC Project Status Report: #08
Project Manager: <<name of the student>>
<<name of the student>>
<<name of the student>>
<<name of the student>>
Status as of: 25/05/18 End of Week: 16
Earned Value Figures
PV EV AC SV SPI CV CPI BAC EAC VAC
$252,
400.0
0
$35,6
00.00
$32,400.
00
$216,8
00.00
0.14 $3,200.00 1.1 $330,200.
00
$300,520.43 $29,679.57
Project Description
The project is developed to design a new method of production of the prototype along with
software, hardware, and mechanical component alignments. The project comprises of four parts
namely electronics, mechanics, software, and prototype designing. The expected completion
date of the project (assuming it started on 5th February, 2018) is Tuesday 21 August 2018. The
duration of the project is 149 days. The Software development, activities related to electronics,
activities related to mechanics, and prototype I and II build up took collectively 50 days resulting
in 149 days for the completion of the project. The schedule variance of the project as on 25th
May, 2018 demonstrates that 86% of the MDC project is still left to be completed.
Milestone Status
Milestone Description Week
scheduled
(baseline)
Date scheduled
(baseline)
Week & date
Reached
M1 Concept review 1 Mon 05-02-18 1 (Reached)
PartC.mpp

M2 Designs Complete and Reviewed 21 Thu 08-03-18 5 (Reached)
P1 P1 Prototype-build start 4 Mon 23-04-18 Never reached
P2 P2 Prototype-build start 11 Thu 07-06-18 Never reached
M3 Final Design review 29 Fri 13-07-18 Never reached
M4 Launch review 34 Fri 17-08-18 Never reached
B1 P1 prototype build booking 8 Fri 23-03-18 7 (Reached)
B2 P2 prototype build booking 17 Fri 11-05-18 14 (Not reached)
B3 Type Approval (TA) 27 Tue 01-05-18 13 (Not reached)
The Milestones P1, P2, M3 and M4 are never reached as they are scheduled after 25/5/18
means that it has been set as the status date for progress reporting. The status date helps to
determine the % work completed by the mentioned date. The milestones P1, P2, M3 and M4
starting date is beyond the status date hence, those have been marked as “Never reached”.
Status summary (schedule and budget)
Schedule
Planned finish date (from Gantt chart): Tue 21-08-18
Current estimated finish date (from tracking Gantt chart): Fri 17-08-18
The planned cost to date: $330,200.00
The actual cost to date: $32,400.00
The earned value to date: $35,600.00
Schedule Variance: (-) 86%
Summary:
The project is working on schedule as expected and it is estimated that the project would be
completed in the estimated time duration.
The schedule variance of the project as on 25th May, 2018 is (-) 86% which means that 86% of the
MDC project is still left to be completed.
Budget
The actual cost to date: $32,400.00
The earned value to date: $35,600.00
Cost Variance: $3,200.00
CPI: 1.1
Summary:

The project is working on expected budget as expected and it is estimated that the project would
be completed in the allocated time budget.
The cost variance of the project as on 25th May, 2018 is 1.1 and hence it means that the MDC
project is progressing well and it is under budget.

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