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Cost Management/EVM

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Viswanathan Raju
Posts: 16
Joined: Sat Nov 02, 2019 6:17 am

Cost Management/EVM

Mon Aug 03, 2020 2:59 pm

Hello Mr.Manish,
Could you please explain the below SOLUTION ,how to arrive it.
Thanks.

You are presenting project performance for a project with duration of 8 years. Year 5th has been spectacular performance however you tell steering group that 5th year cost performance was atypical and you expect that your project will perform with index which was at the end of 3rd year but will continue with schedule variance as of 5th year. Would you be able to complete project in time and under budget?

A.Project will be on time and under budget

B.Project will be delayed and under budget

C.Project will be delayed and over budget

D.Project will be on time and over budget

SOLUTION:
At 5th year SPI is 1 and hence project will complete on time if it continues with the same SPI
At 3rd year EV = 750, AC = 1000, CPI = EV/AC = 0.8
At this CPI , EAC = BAC/CPI = 3000/0.8 = 4000
Hence project will complete on time and over budget
manishpn
Expert
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Posts: 3063
Joined: Sat Jan 04, 2014 3:55 pm

Re: Cost Management/EVM

Sun Aug 16, 2020 4:15 am

Viswanathan Raju wrote:
Mon Aug 03, 2020 2:59 pm
Hello Mr.Manish,
Could you please explain the below SOLUTION ,how to arrive it.
Thanks.

You are presenting project performance for a project with duration of 8 years. Year 5th has been spectacular performance however you tell steering group that 5th year cost performance was atypical and you expect that your project will perform with index which was at the end of 3rd year but will continue with schedule variance as of 5th year. Would you be able to complete project in time and under budget?

A.Project will be on time and under budget

B.Project will be delayed and under budget

C.Project will be delayed and over budget

D.Project will be on time and over budget

SOLUTION:
At 5th year SPI is 1 and hence project will complete on time if it continues with the same SPI
At 3rd year EV = 750, AC = 1000, CPI = EV/AC = 0.8
At this CPI , EAC = BAC/CPI = 3000/0.8 = 4000
Hence project will complete on time and over budget

To be able to get the right answer, there is no need to do EVM Math, also there is no data given in question that can help yu with exact EV, AC etc. Also the data provided cannot conclusively tell us on the options, but helps us guide to that

We can use logic to solve the question
'Year 5th has been spectacular performance however you tell steering group that 5th year cost performance was atypical'
This means that the projects cost and schedule variance was best in 5th year, the performance is atypical

If the project was to continue with its 5th year performance there is a high chance that project will be well under budget and time
'you expect that your project will perform with index which was at the end of 3rd year but will continue with schedule variance as of 5th year'

this means that there is a high chance (cannot conclude from the info in the question) that project will be on time however the budget may exceed ( again cannot conclude from the info in the question)
Br,
Manish P
PMP, PMI - ACP, SAFe Agilist
http://www.izenbridge.com/blog/7-effect ... ification/

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