Theformula for calculating the earned value is:
EarnedValue = Percent Complete * Budget at completion
Thepercentage of the project that is complete is 51.4 the amount spentso far is 1,005, 000. The estimate for the complete project was thus1,955,000. For this reason, the earned value is
51.4%* 1955000 = 1,004,870
1.a. Cost variance = Earned Value – Actual Cost
1,004,870– 1,005, 000 = -130. This means that the project is over thebudget.
CostPerformance Index = earned value/actual cost
1,004,870/ 1,005, 000 = 0.998.
Thisshows that the efficient utilizing of resources is not good. Thus farthe project is over the estimated budget.
b. the planned value is 1,955,000
TheSchedule variance would be 1,004,870 – 1,955,000 which would be-950130
c. the schedule performance index is 1,004,870/1,955,000 = 0.514
The work breakdown structure can be used effectively to manage the project. The reason is because it breaks down the project into different parts. This makes it easier to schedule since the individual tasks are easier to manage. If followed strictly and allowed ample time for each project, it would be impossible spend time more time than is necessary for the assignment. Also this structure breaks down the costs per the tasks of the project. This means that there is no money wasted or not allocated to ensure the successful completion of tasks.