A project to build a new bridge seems to be going very well since the project is well ahead of schedule and costs seem to be run

Question

3 years ago

5

A project to build a new bridge seems to be going very well since the project is well ahead of schedule and costs seem to be run

ning very low. A major milestone has been reached where the first two activities have been totally completed and the third activity is 60% complete. The planners were expecting to be only53% through the third activity at this time. The first activity involves prepping the site for the bridge. It was expected that this would cost $1,414,000 and it was done for only $1,294,000. The second activity was the pouring of concrete for the bridge. This was expected to cost $10,494,000 but was actually done for $8,994,000. The third and final activity is the actual construction of the bridge superstructure. This was expected to cost a total of $8,494,000. To date, they have spent $4,994,000 on the superstructure. Calculate the schedule variance, schedule performance index, and cost performance index for the project to date. (Round your "performance index" values to 3 decimal places.)

Business

1 answer:

tresset_1 [31] · Answer 1 · 2022-01-26T21:04:58+03:00

Answer:

Schedule variance = $1,428,140

Schedule Performance Index (SPI) = 1.132

Cost Performance Index = 0.801

Explanation:

Planned Value = $1,414,000 + $10,494,000 + $8,494,000 * 53%

= $20,402,000 * 53%

= $10,813,060

Earned Value = $1,414,000 + $10,494,000 + $8,494,000 * 60%

= $20,402,000 * 60%

= $12,241,200

Schedule Variance = Earned value - Planned value

= $12,241,200 - $10,813,060

= $1,428,140

Schedule Performance Index (SPI)

= Earned value / Planned value

= $12,241,200 / $10,813,060

= 1.132

Actual Cost (AC)

= $1,294,000 + $8,994,000 + $4,994,000

= $15,282,000

Cost Performance Index (CPI)

= Earned value / Actual cost

= $12,241,200 / $15,282,000

= 0.801