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Project cost management is one of the most critical project
management areas, since most projects at the end exceed their budgets.
Project managers must make sure their projects have accurate time and
cost estimates, have a realistic budget, and a constant costs &
tasks control is in place. Based on the Running case scenario on page
305 from Schwalbe’s text please complete the following four tasks:
Assume following parameters:
Labor rate of $100/hour for the Project manager· Labor rate of $60/hour
for all other project team members – you may expect some of the project
members and the project manager not to be at a full-time position.·
None of the work is outsourced and there are no additional labor or
material costs· The total estimate should be $200,000.2. Using the cost
estimate model you created in the first task, prepare a cost baseline by allocating the costs byWBS for each month of the project. Use the sample spreadsheet cost baseline
from the attached file: PM_Ass_5_running case 7.xls.3. Assume you have
completed three months of the project and theBAC (budget at completion)
was planned $200,000 for this six months project. Assume also:· PV
(Planned Value) is $120,000· EV (Earned Value) is $100,000· AC (Actual
Cost) is $90,0003.1. What is the cost variance, schedule variance, cost
performance index (CPI), and schedule performance index (SPI) for the
project?3.2. Use theCPI to calculate the estimate at completion (EAC)
for the project.3.3. Use the schedule performance index (SPI) to
estimate how long it will take to finish this project.3.4. Create an
earned value chart using the above information – use as a model Figure
7-5 from page 294.4. Write a midterm report (two pages
total) to the stakeholders describing how the project is doing at this
stage (at the middle of the project life-cycle). Is the project on
schedule, and how is the budget? Make a statement about the completion
of the project. Support your report with tables, calculations and charts
you completed in the first three tasks – you could integrate most of
them in the report or attach them as appendixes.