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Michael Dunn is an experienced project manager in an Australian manufacturing firm. Based on his success in managing technology implementation projects in recent years, he was appointed as the project manager of an important internal project late last year. Even with his vast experience in internal projects, he finds that the current project work is more complicated than he had expected in the beginning. The total budget for the project is $137,200. His supervisor, Tony Glover became very concerned when he saw that the project cost so far as $110,420 and was worried about the progress of the project. Michael has calculated the value of the work completed ($87,150 at original budget rates) and checked the value of the work he should have completed by now ($97,920 at original budget rates).
a) What are the values of the PV (Planned Value), EV (Earned Value) and AC (Actual Cost)?
b) Calculate the schedule variance, cost variance and forecasted total cost at completion. Write a summary statement on the performance of the project.
c) When would cost and schedule performance indexes to be more useful than cost and schedule variances?
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