Cost Performance Index and Project Management

The assignment provided involves calculating the cost performance index (CPI) for a Driverless Taxi System (DTS) project. The CPI is calculated as BCWP/ACWP, where BCWP is budget at completion and ACWP is actual cost of work performed. Using a sample data, the CPI is found to be 0.97, indicating that the project is under budget. The assignment also discusses various actions that can be taken to prevent incidents from occurring or minimize their impacts, such as analyzing unforeseen incidents, estimating time properly, and managing problems effectively. The document includes a bibliography of relevant sources for further reading.

Running head: PROJECT MANAGEMENT
Case Study-Driverless taxi system (DTS)
Name of the Student
Name of the University
Author’s Note

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PROJECT MANAGEMENT
Table of Contents
Section 1: Defining the Project..................................................................................................3
Question 1:.............................................................................................................................3
a) Explanation of the need of Virtual project team in DTS project and illustration of
challenges and strategies for managing DTS virtual project team.....................................3
Question 2:.............................................................................................................................4
a) Appraisal of project priority and construction of project priority matrix......................4
b) Examination of four conditions that assists in deciding the use of cost estimation
approach within the project................................................................................................6
Section 2:....................................................................................................................................7
Question 3:.............................................................................................................................7
a) Gantt chart after clear levelling and explanation of resources that conflict...................7
b-i) Resource levelling, examine changes and evaluation of impact on project schedule. 8
b-ii) Levelling beyond deadline and discussion of its impact on project schedule............9
Section 3:..................................................................................................................................10
Question 4:...........................................................................................................................10
a) Demonstrate single diagram of Tracking Gantt chart..................................................10
b) Graph showing cumulative Actual cost and Cumulative budgeted cost curve and
comment on the variations...............................................................................................11
c) Demonstration of Cost performance index and computation of CPI...........................11
Question 5:...........................................................................................................................13
a) Action that have been done for preventing incident from occurring or to minimize its
impacts.............................................................................................................................13
Bibliography.............................................................................................................................14

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Section 1: Defining the Project
Question 1:
a) Explanation of the need of Virtual project team in DTS project and illustration of
challenges and strategies for managing DTS virtual project team
In DTS project, SMT “Swift Mobile Technology company will mainly engage in
integrating the parts of the car that is supplied by GCA from Germany and Siam Vehicle
from Thailand and on the other hand, GCA will engage in customizing a car engine for the
taxi. As the organization likes Express Connect Services, Swift Mobile Technology and Geng
Car Ag belong to different geographical location it is quite difficult to create a team in any
one place and thus Virtual project team for the DTS project will be beneficial. It is identified
that the concept of virtual team for DTS project would be advantageous as it is one of the cost
effective tap to include wide pool of talent from different location to complete the project
successfully.
The challenges that are associated with managing the DTS Virtual Project Team are
as follows:
Difficult in decision making: It is quite difficult to make decisions with virtual team
as the absence of proper visual cues makes it more difficult for the team members of the
virtual team to collaborate and build trust.
Communication: While working with virtual team, it is very much necessary to
create proper communication channels at the right time as loss of information as well as
miscommunication can create challenges within the virtual team.
The strategies that are helpful for managing DTS virtual project team are as follows:

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Establish multiple communication tools: Establishing multiple communication
tools is necessary in order to communicate about te project or the risks that are associated
with the project. Proper communication tool helps in unifying the team which further assists
in creating a feeling of togetherness among the team members.
Scheduling regular meeting: Regular meetings are necessary for maximizing
efficiency of work and for keeping the team members at ease so that they can be able to
complete the project work properly.
Define work system: As different people have different ways of doing task it is very
much necessary to set some standards which will further help in shortening the time that is
needed to achieve the desired result. The work system should be standardized for allowing
proper effectiveness in order to complete the task as per the ability.
Question 2:
a) Appraisal of project priority and construction of project priority matrix
It is found that in order to prioritize project work for the DTS virtual team, it is quite
necessary to follow some of the steps that are as follows:
Make project schedule visible: It is identified that making project schedule visible
is necessary in order to keep the team members updated on top priorities every day by
utilizing proper management tool is necessary.
Providing project task proper completion date: Providing deadline for each and
every activities of the project is necessary for completing the project work within time and it
also assists in prioritizing work as per their urgency.
Add buffers: It is very much necessary for the project managers to add buffers in
account for different types of uncertainties that can occur in the project schedule.

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Learn for predicting priority shifts: It is necessary to aware of all the project parts
as improper prediction can affect the priorities of the team.
Draw line between urgent and important activity: It is necessary to give immediate
attention to urgent task while important tasks of three projects can receive on-going attention.
Priority Matrix is considered as one of the beneficial tool for the project, which
assists in identifying criteria, which is constrained, which should be enhanced and which can
be accepted.
Constrain: The original parameter of the project remains fixed in order to meets the
objectives of the project.
Enhance: Within the project scope, the criteria that needs to be optimized is generally
enhanced
Accept: the criterion which is tolerable within the project is generally accepted.
Project Priority Matrix
Time Performance Cost
Constrain
Enhance
Accept
Figure 1: Project Priority Matrix
(Source: Created by Author)

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The above figure helps in displaying the priority matrix for the DTS project. As the
project manager is asked to change the schedule if it is necessary to maintain the quality as
well as performance of DTS project. Therefore time constraint is enhanced, and in doing so,
the cost of the project increases which is acceptable though not desirable within the project.
b) Examination of four conditions that assists in deciding the use of cost estimation
approach within the project
1st Condition
For unstable scope (condition) top down estimate is preferred because the person
who is engaged in estimation is experienced and thus cost determination will be appropriate
for the project. However, this is not the case in DTS project as the project manager is
inexperienced. Hence SMT shall use Bottom up estimate under this condition.
2nd Condition
For High uncertainty (condition) top down estimate is preferred because experience
person can be able to manage uncertainty and can predict cost. However, this is not the case
in DTS project as the project manager is inexperienced. Hence SMT shall use Bottom up
estimate under this condition.
3rd condition
For cost and time important (condition) bottom down estimate is preferred because it
helps in allowing more proper estimation for particular work. However, this is case in DTS
project proper time and cost estimation is made by the CEO. Hence SMT shall use Bottom up
estimate under this condition.

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PROJECT MANAGEMENT
4th Condition
For Strategic decision-making (condition) top down estimate is preferred because
the person who are involved are experienced and thus they can be able to make proper
decision. However, this is not the case in DTS project because all the team members of the
project are inexperienced as the project Driverless taxi system is totally new. Hence SMT
shall use Bottom up estimate under this condition.
Overall, SMT use a Bottom-up estimate approach.
Section 2:
Question 3:
a) Gantt chart after clear levelling and explanation of resources that conflict
Figure 2: Gantt chart

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(Source: Created by Author)
From the above, figure, it can be analyzed that the completion date of the project is
27th December 2017.
It is identified that the resources Ms Siti and Mr Tomsak of the project generally
conflicts as they are mainly overburdened to complete the work of the project. It is identified
that Ms Siti is mainly engaged in designing system, controlling car as well as co-ordinating
partners on various types of technical issue. On the other hand, Mr Tomsak role is to design
the accessories and chassis of the car. Both are high over allocated within the project work
and as a result conflict occurs.
b-i) Resource levelling, examine changes and evaluation of impact on project schedule
It is identified from the figure below that after levelling within the slack, the total
time of the project does not changes. However the time for the activity “train operation centre
staff” increase from 11 days to 19 days but the changes in days in not reflected in the total
duration of the project.
Figure 3: Gantt chart after resource levelling

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(Source: Created by Author)
b-ii) Levelling beyond deadline and discussion of its impact on project schedule
It is identified from the figure below that after levelling beyond deadline, the total
duration that is needed for completing the project of DTS increases. It is found that the
duration of the project increases from 98 days to 104 days.
Figure 4: Gantt chart after resource levelling beyond deadline
(Source: Created by Author)

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Section 3:
Question 4:
a) Demonstrate single diagram of Tracking Gantt chart
It is identified from the figure below that the entire project of Driverless taxi System
will be completed by 9th January 2018.
Figure 5: Tracking Gantt chart
(Source: Created by Author)

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b) Graph showing cumulative Actual cost and Cumulative budgeted cost curve and
comment on the variations
'17 '17 '17 '17 '17 '17 '17 '17 '17 '17 '17 '17 '17 '17 '17 '17 '17 '17 '17 '17 '17 '18 '18
$ 0
$ 100,000
$ 200,000
$ 300,000
$ 400,000
$ 500,000
$ 600,000
ACWP BCWP BCWS
Figure 6: Graph showing cumulative Actual cost and Cumulative budgeted cost curve
(Source: Created by Author)
It is identified from the graph that as cumulative actual cost is higher than earned
value therefore the project is over budget. However, as the cumulative budgeted cost is higher
than earned value it can be analyzed that project is behind schedule.
c) Demonstration of Cost performance index and computation of CPI
Cost performance index generally assists in analyzing the efficiency of the budget that
is mainly used by the project. It is identified that it helps in measuring the value of the work
completed in comparison to actual cost spent on the project.
The formula of CPI= BCWP/ ACWP.
From the project, it can be identified that BCWP= $491600 and ACWP= 505000
CPI= BCWP/ ACWP

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=491600/505000
=0.97
Therefore, Cost performance index of the project is 0.97
The total cost of the project that is generally needed for completing the project is
around $505,000 which is generally reflected with the help of the table below:
Task Name Cost
Driverless Taxi System (DTS) Project $ 505,000
Conduct initial remote project meeting $ 2,000
Study ECS requirements and traffic rules $ 20,000
Purchase electronic components $ 62,400
Design DTS Car Control System $ 42,000
Customise car engine $ 101,000
Design car chassis $ 13,600
Fabricate car chassis $ 52,000
Prepare Car Accessories $ 17,200
Assemble car & engine at SMT $ 39,200
Install control system in car $ 38,000
Test car in SMT Lab $ 25,000
Conduct civil works in Pulau Ubin $ 18,000
Trial run in Pulau Ubin $ 40,000
Seek approval by Land Network Board $ 13,000
Train Operation Centre staff $ 19,800
Launch Driverless Taxi System $ 1,800

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Question 5:
a) Action that have been done for preventing incident from occurring or to minimize its
impacts.
Over budget: It is identified from the project that after implementation of DTS
system, some unforeseen incidents occur and as a result the total cost of the project increases.
If the project manager would have analyzed the unforeseen incidents of the project then the
chances of increasing project budget can be reduced.
Inappropriate estimation of time: If the project managers have estimated the time
for each and every activities of the project properly then the entire project would have been
successfully completed within the estimated time.
Extension of project completion date: As to resolve the problems that occur due to
unforeseen activities, the entire time for the project completion extended to 9th January 2018.
However, if the project manager would have managed the problem properly then the entire
project would have completed within the estimated time that is 31st December 2017.

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Bibliography
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