April 1999
PM217: PROJECT MANAGEMENT

QUESTION 5

Total Marks: 20 Marks

 Click here to access other questions

Click to access
SAMPLE STUDENT'S SOLUTIONS
for Question 5

 
(a) One possible method of cost estimation and work performance management is the fifty-fifty rule. With the support of a diagram, describe in some detail how this rule works.

 

 [4]
(b) A software development project initial planning has been budgeted to complete at $1,000,000, over a development time frame of 15 weeks in 3 phases. The three phases as originally planned are as follows:

Phase 1, lasting 5 weeks, with a planned cost of $600,000. Phase 2, lasting 7 weeks, with a planned cost of $300,000. Phase 3, lasting 3 weeks, with a planned cost of $100,000.

However, due to complications in the actual development, the following took place:

After 8 weeks of development, phase 1 has been completed at a cost of $640,000. However, phase 2, although started, has yet to be completed, and expenditure so far for the phase is at $240,000.

Now using the fifty-fifty rule, together with your knowledge of the earned value approach, calculate the following:

 
(i) Schedule variance (SV), cost variance (CV), Cost performance index (CPI), and estimated cost at completion (EAC) for phase 1. [4]
(ii) Schedule variance (SV), cost variance (CV), Cost performance index (CPI), and estimated cost at completion (EAC) for phase 2.


Ensure that you clearly indicate all working in the derivation of your answers.

 

 [6]
(c) Evaluation tests are frequently conducted in project management to see whether targets are met. Identify, and explain any three types of evaluation processes. [6]