Answer:
1. schedule variance = -$52,500
2. SPI = 0.65
3. CPI = 0.56
Explanation:
to get the solution, we calculate for BRWS and BRWP
first we calculate the budgeted revenue of the work scheduled for each activity using this formula:
<u>budgeted</u><u> </u><u>revenue</u><u> </u><u>*</u><u> </u><u>planned</u><u> </u><u>completion</u>
A = 25,000 x 100percent
= $25000
B = 150,000 x (25/30) percent
= $125000
C = 50000 x 0percent
= 0$
total = $25000+$125000+$0
= $150000
Next we calculate budgeted revenue of work performed (brwp)
<em>calculated using this formula</em>:
<u>budgeted revenue x actual </u><u>completion</u>
A = 25000 x 90percent
= 22500 dollars
B = 150000 x 50percent
= $75000
C = 50000 x 0%
= $0
total = 22500 + 75000 + 0
= $97500
<u>1</u><u>.</u><u> </u><u>schedule</u><u> variance</u><u> </u><u>=</u><u> </u><u>BRWP </u><u>-</u><u> </u><u>BRWS</u>
<u>=</u><u> </u>$97500 - $150000
= -$52500
<em>we </em><em>have</em><em> a</em><em> </em><em>negative</em><em> </em><em>schedule</em><em>,</em><em> </em><em>telling</em><em> </em><em>us </em><em>that </em><em>the </em><em>project</em><em> </em><em>is </em><em>behind</em><em> </em><em>schedule</em>
<em>2</em><em>.</em><em> </em><u>schedule</u><u> </u><u>performance</u><u> </u><u>index </u><u>=</u><u> </u><u>revenue</u><u> </u><u>of </u><u>work </u><u>performed</u><u> </u><u>divided </u><u>by </u><u>revenue</u><u> of</u><u> work</u><u> </u><u>schedule</u>
<u>=</u><u> </u>97500/150000
= 0.65
3. <u>cost price index = revenue of work performed divided by actual revenue</u>
= 97500/175000
= 0.56
4. <u>how </u><u>the </u><u>project</u><u> </u><u>is </u><u>going</u><u>:</u>
the schedule performance index (SPI) is 0.65 which is less than 1. this is to say that the project is doing better than planned revenue when we talk of revenue
