Cost Performance Index Analysis

A comprehensive analysis of the Sky Roller Coaster project reveals a mixed bag of performance indices. While eight out of the 16 activities are expected to complete as planned, five activities require attention from management regarding cost and time allocation. The overall Cost Performance Index (CPI) is 0.96, indicating that the project will need some support from management to overcome potential challenges. Three actions for issue prevention were identified: contingency funding, time buffers, and task identification. These measures could have helped mitigate the impacts of issues that arose during the project.

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Project Management
Roller Coaster
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ROLLER COASTER PROJECT MANAGEMENT 1
Abstract
The project is based on the revamp of the roller coaster project of SWL. The project was set to be
completed by December 22 however due to some resource leveling challenges it extended to
December 28. Moreover, the paper considers managing various challenges that occurred
concerned with motor upgrade, entrance size correction and others.
The costs and time aspects of the various activities have been shown using different snapshot
from MS Project.

ROLLER COASTER PROJECT MANAGEMENT 2
Table of Contents
Abstract............................................................................................................................................1
Section 1: Defining the Project........................................................................................................3
Question #1a: Project Priority Matrix..........................................................................................3
Question #1b: Cost Estimation Approach....................................................................................3
Section #2: Managing the Project Team..........................................................................................4
Question #2a: Advantages of Outsourcing..................................................................................4
Question #2b: Relevant Best Practices........................................................................................4
Section #3: Scheduling Resources and Costs..................................................................................5
Question #3a: Gantt chart with Table..........................................................................................5
Question #3b: Resource Leveling within the Schedule...............................................................5
Question #3c: Resource Leveling beyond the Deadline..............................................................6
Section #4: Base-lining and Tracking Project.................................................................................6
Question #4a: Minor Cost Changes.............................................................................................7
Question #4a (i): Incorporating Further Changes........................................................................8
Question #4a (ii): Gantt chart with Completion Date..................................................................8
Question #4a (iii): Cost Performance Index (CPI).......................................................................9
Question #4b: Actions for Issue Prevention..............................................................................11

ROLLER COASTER PROJECT MANAGEMENT 3
Section 1: Defining the Project
This section is concerned with the definition of the Roller Coaster Project. The project is
concerned with the redevelopment of the roller coaster of Super Wonderland (SWL) Pte Ltd in
Singapore. SWL is one of the world’s largest entertainment companies with interest in various
fields such as movies, theme parks and resorts. Due to government directives, it is mandatory to
for the company to either close the old Roller Coaster or revamp the same as per the new
directives. This paper has focused towards the same in detail.
Question #1a: Project Priority Matrix
Based on the CEO’s direction, the project priority matrix has been developed as follows:
Tim
e
Scope Cost
Constrain X
Enhance X
Accept X
The points below explain the identification of priority matrix in above given pattern:
 Time is needed to be enhanced because there are some resources which are not allocated
in a proper manner. As the time is limited for the project because it is going to be
launched on 30 Dec 2016. So, time can be enhanced by the management.
 Scope is constrain because if all requirements of the government is not fulfilled in an
appropriate manner than the government will not approve SWL to open Roller Coaster
for customers.
 Cost is acceptable because if the cost is reasonable by the management.
Question #1b: Cost Estimation Approach
Mentioned below are the four relevant conditions in deciding to use the Top-down or Bottom up
Estimate approach for estimating the project cost:
Cost and Time Important
For condition on “Cost and Time”, Bottom-up Estimates is preferred because managed rarely
hold information about the projects with which they are less acquainted with. This is the case for

ROLLER COASTER PROJECT MANAGEMENT 4
the RCS Project as the management has no understanding of the cost and time that will be
incurred on the activities. Hence SWL shall use Bottom-up Estimate under this condition.
Fixed price contract
For condition on fixed price contract, Bottom up estimates is preferred because it is mandatory
that project manager have complete understanding about the overall expense as there exits less
opportunity for budget extension. This is the case for the RCS Project as the management has
allowed the Tron AG to set the reasonable budget but it may be one time pay. The reinforcement
of the structure will require some major investment which can be provided by the management if
the budget sounds reasonable. Hence, SWL shall use Bottom up estimate under this condition.
Internal, small project
For condition on internal, small project, top-down estimates is preferred because management
holds enough understanding of the expenses that can be done. This is not the case for the RCS
Project as the project is small but management has no understanding of the expenses. Hence,
SWL shall use Bottom up estimate under this condition.
Strategic Decision Making
For condition on strategic decision making, top down estimates is preferred because it is
expected that the management has the complete understanding entire project due to the past
experience. This is not the case for the RCS Project as the management has never involved in
redevelopment of revamping of the roller coaster. Hence, SWL shall use Bottom up approach.
Based on the discussion, it has been decided that Bottom-up Approach will be used for the
project. The cost estimation method will be bottom up, which is also referred as the definitive
technique. This method of cost estimation will be time consuming for the company. However, as
the company has no understanding about the amount of budget that is suitable for this project,
consideration of the bottom approach has been suggested.
Section #2: Managing the Project Team
This section will focus on the assessment of the outsourcing the works and the relevant best
practices.
Question #2a: Advantages of Outsourcing
As this project has been outsourced to the Tron AG, there are various benefits that are associated
with this. Some of them are:
 Expertise: SWL outsourced its tasks to Tron AG as they specialize in this field. Due to
the appointment of Tron AG, RCS project may utilize the expert services. (Schniederjans

ROLLER COASTER PROJECT MANAGEMENT 5
et al, 2015). This will enhance the success chance of the RCS project. Quality of the
project enables the SWL in creating a good image in the eyes of the consumer.
 Reduced cost: Hiring the expert services reduced the wastage of resources, due to which
it helps SWL in cost saving. This leads the development of the project in a structured
budgeted amount (Gummerus et al, 2016).
Question #2b: Relevant Best Practices
Mentioned below are the three relevant best practices in outsourcing project work to manage
Tron AG:
Well-defined requirements and procedures
The requirements of project should be clear from the beginning as it diminishes any opportunity
for the confusion. Moreover, both the parties should be clear about the processes that will be
undertaken while moving ahead with the project. This will reduce any chance of conflict
between the outsourcer and the outsourcee company.
Extensive training and team-building activities
Training and team-building activities in the beginning of the project are imperative to ensure that
all the individuals are aware of the activities that are required to be done from the beginning.
Moreover, the team building excursive helps the team get acquainted with all the staffs thus
reduces the chances of conflict.
Frequent review and status update
It helps the management to stay assured that the project is moving ahead as per the required
plans and budget. Moreover, it helps the management in providing useful suggestions as and
when required. The review of the status by the management will help them in understanding the
areas that need particular attention from the management and the areas that can be easily handled
by the Tron AG. The management of the Roller Coaster is expected to be appreciably handled by
the Tron AG. However, constant monitoring and assessment is required for the project final
quality. Leaving the whole project to be assessed in the end will result in the issues that would
not be possible to manage by the inauguration date which is December 30. Therefore, frequent
review and status update is imperative for the successful completion of this project.
Section #3: Scheduling Resources and Costs
This section discusses project activities and develops the project activities through the use of MS
Project.
Question #3a: Gantt chart with Table
The image below shows the project activities and the project completion date. The project will
complete on December 22 with few resource conflicts. There are four resource conflicts that can

ROLLER COASTER PROJECT MANAGEMENT 6
be observed from the snapshot below, namely, Purchase New Motor, Purchase New Seats,
Prepare Worksite, and Expand Electrical Power Capacity. It is expected that these conflicts
might be resolved to some extent with the help of certain adjustments in the further sub-sections.
Question #3b: Resource Leveling within the Schedule
In this step, the resources have been leveled. The completion date is still December 22 as the
leveling was done within the schedule. The resource leveling has helped level two conflicts,
namely, Purchase New Motor, and Purchase New Seats. However, the other two activities can be
observed still having the conflicts, namely, Prepare Worksite, and Expand Electrical Power
Capacity. The activity no. 4 and 5 are out of resource conflict whereas the other two consecutive
activities 6 and 7 are still under conflict.

ROLLER COASTER PROJECT MANAGEMENT 7
Question #3c: Resource Leveling beyond the Deadline
The resource leveling after removing the time constraint has helped level all the resources and
remove any conflicts that were being confronted. The project completion date has extended from
December 22 to December 28.
Section #4: Base-lining and Tracking Project
As stated, CEO has now approved the new completion that has been observed in the previous
step, that is, December 28. Now, it is required to change the deadline to the new completion date.
The Status date has been set to September 1 2016. This same date has been set baseline has been
set for the entire project. The snapshot after the changes is below.
This first image shows the entry:

ROLLER COASTER PROJECT MANAGEMENT 8
This second image shows the cost (after setting the baseline):
Question #4a: Minor Cost Changes
The image below shows the several issues that came up, namely, appreciation of Japanese Yen
and enlargement of entrance to worksite. Moreover, 10% discount by Tron AG is another
change.
Question #4a (i): Incorporating Further Changes
The up-gradation of motor led to some changes. Hashim is the responsible individual for this
activity. Therefore, the five non-working days will be selected for the extra activity. It can be
observed from previous resource leveling and other adjustments that the Activity 14 has zero
slack time. Therefore, the other non-working days that have been picked for the tasks are given
below:

ROLLER COASTER PROJECT MANAGEMENT 9
Day Date Cost
December 24 Saturday $1000
December 25 Sunday $1000
December 26 Monday (Off due to Christmas Holiday on Sunday) $1000
December 29 Thursday $500
December 30 Friday $500
Total $4000
The total additional cost that will be incurred is $1,000 per Saturday, Sunday, and Public
Holiday. Therefore, total additional cost reaches to $4,000.
At this stage, the CEO approved all the changes. The project progresses and it was re-launched
on the date in the final plan.
The cost structure below shows the additional cost:
Shown below is the snapshot with extension in the days for Activity 9 as per the extension to 20
days. The five days have been shown in the above table. The use of two additional working days
has extended the overall duration to December 30 (the deadline to inaugurate as per the
Government):

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Question #4a (ii): Gantt chart with Completion Date
The image below shows the Tracking Gantt chart view of MS Project with columns shown for
Task Name, Duration, Start Date, Finish Date, and Completion Date:
Question #4a (iii): Cost Performance Index (CPI)
Cost performance index is used to measure the efficiency of expenses spent on a project. It
measures the value of the completed work compared to the actual cost spent on the project. Cost
performance index specifies how much the organization is earning for each dollar spent on the
project (O'hara,2013). CPI can be calculated by dividing earned value by actual cost.
CPI = EV/AC
Task Name
Planned
Value - PV
(BCWS)
Earned Value
- EV (BCWP) CV CV% CPI BAC EAC VAC
1 Roller $265,000.00 $265,000.00 ($10,000.00) -4% 0.96 $265,000.00 $275,000.00 ($10,000.00)

ROLLER COASTER PROJECT MANAGEMENT 11
Coaster
Safety
Project
2 Initial
Meeting $0.00 $0.00 $0.00 0% 0 $0.00 $0.00 $0.00
3
Consultation
by Tron AG
$20,000.00 $20,000.00 $2,000.00 10% 1.11 $20,000.00 $18,000.00 $2,000.00
4 Purchase
new motor $80,000.00 $80,000.00 ($4,000.00) -5% 0.95 $80,000.00 $84,000.00 ($4,000.00)
5 Purchase
new seats $30,000.00 $30,000.00 $0.00 0% 1 $30,000.00 $30,000.00 $0.00
6 Prepare
worksite $10,000.00 $10,000.00 ($4,000.00) -
40% 0.71 $10,000.00 $14,000.00 ($4,000.00)
7 Expand
electrical
power
capacity
$25,000.00 $25,000.00 $0.00 0% 1 $25,000.00 $25,000.00 $0.00
8 Reinforce
Sky Rock
structure
$50,000.00 $50,000.00 $0.00 0% 1 $50,000.00 $50,000.00 $0.00
9 Upgrade
motor $9,000.00 $9,000.00 ($4,000.00) -
44% 0.69 $9,000.00 $13,000.00 ($4,000.00)
10 Replace
Sky Rock
seats
$5,000.00 $5,000.00 $0.00 0% 1 $5,000.00 $5,000.00 $0.00
11 Test
system $10,000.00 $10,000.00 $0.00 0% 1 $10,000.00 $10,000.00 $0.00
12
Landscaping $12,000.00 $12,000.00 $0.00 0% 1 $12,000.00 $12,000.00 $0.00
13
Certification
by
Regulation
Board
$5,000.00 $5,000.00 $0.00 0% 1 $5,000.00 $5,000.00 $0.00
14 Update
Safety
procedure
document
$2,000.00 $2,000.00 $0.00 0% 1 $2,000.00 $2,000.00 $0.00
15 press
release $2,000.00 $2,000.00 $0.00 0% 1 $2,000.00 $2,000.00 $0.00
16 Relaunch
Sky Roller
Coaster
$5,000.00 $5,000.00 $0.00 0% 1 $5,000.00 $5,000.00 $0.00

ROLLER COASTER PROJECT MANAGEMENT 12
All the Cost Performance Index has been explained as below:
1. CPI of the activity 3 is 1.11; it means that the activity will complete as planned.
2. CPI of the activity 4 is 0.95; it means that the activity will complete as planned.
3. CPI of the activity 5 is 1; it means that the activity will complete as planned.
4. CPI of the activity 6 is 0.71; it means that the activity will complete as planned.
5. CPI of the activity 7 is 1; it means that the activity will complete as planned.
6. CPI of the activity 8 is 1; it means that the activity will complete as planned.
7. CPI of the activity 9 is 0.64; it means that the activity will require attention from the
management regarding resource allocation such as time and cost.
8. CPI of the activity 10 is 1; it means that the activity will complete as planned.
9. CPI of the activity 11 is 0.69; it means that the activity will complete as planned.
10. CPI of the activity 12 is 1; it means that the activity will complete as planned.
11. CPI of the activity 13 is 1; it means that the activity will complete as planned.
12. CPI of the activity 14 is 1; it means that the activity will complete as planned.
13. CPI of the activity 15 is 1; it means that the activity will complete as planned.
Based on this interpretation, it can be stated that eight of the tasks will be completed on the
defined plan. Five activities have CPI value below 1, thus they will require attention from the
management regarding the cost and time allotted to the same. It is possible that the allocation of
more budgets to these activities might improve the cost performance index.
The overall CPI of the project is 0.96 which states that the project will require some attention
from the management regarding the cost and allotted time. Therefore, it can be stated that though
most of the individual tasks are likely to complete as planned, the activity 9 and the overall
project will require some extended support.
Question #4b: Actions for Issue Prevention
Mentioned below are the three actions that could have been done earlier to prevent the issues in
Question #4a from happening or mitigate their impacts:
Contingency Funding
As observed the project extended beyond the required fund due to the increase in the Japanese
Yen and the additional cost in worksite entrance enlargement. This required additional provision
from the management. Therefore, to handle such situations, provision of contingency funding
should have been there.
Time Buffers
The project should have extra slack time so that the project changes such as additional time
required to upgrade the motor could have been handled effectively. The time buffers could have
helped effectively manage the entire activity without pushing Hashim and the associated
individual to indulge in extra activity.

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Tasks Identification
The exact identification of all the tasks in the beginning could have helped effectively. As it can
be understood that the poor identification and estimation of time required doing the same led to
the challenges.
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