# Project Management explained in this answer

1. Given the following information for a one year project, answer the following questions.

PV= \$23,000
EV= \$20,000
AC= \$25,000
BAC= \$120,000

a. What is the cost variance, schedule variance, cost performance index (CPI), and schedule performance index (SPI) for the project?

b. How is the project doing? Is it ahead of schedule or behind schedule? Is it under budget or over budget?

c. Use the CPI to calculate the estimate at completion (EAC) for this project. Is the project performing better or worse than planned?

d. Use the schedule performance index (SPI) to estimate how long it will take to finish this project.

e. Sketch the earned value chart based for this project.

2. Create a spreadsheet to calculate your projected total costs, total revenues, and total profits for giving a seminar on cost estimating. Below are some of your assumptions:

-You will charge \$600 per person for a two-day class

-You estimate that 30 people will register for and attend the class, but you want to change this input.

- Your fixed costs include \$500 total to rent a room for both days, setup fees of \$400 for registration, and \$300 for designing a postcard for advertising.

- You will not include any of your labor costs for this estimate, but you estimate that you will spend at least 150 hours developing materials, managing the project, and giving the actual class. You would like to know what your time is worth given different scenarios.

- You will order 5,000 postcards, mail 4,000, and distribute the rest to friends and colleagues.

- Your variable costs include the following:

a. \$5 per person for registration plus 4% of the class fee per person to handle credit card processing; assume everyone pays by credit card.

b. \$.40 per postcard if you order 5,000 or more

c. \$.25 per postcard for mailing and postage

d. \$25 per person for beverages and lunch

e. \$30 per person for class handouts

*** Be sure to have input cells for any variables that might change, such as the cost of postage, handouts, and so on. Calculate your profits based on the following number of people who attended: 10, 20, 30, 40, 50, and 60. In addition, calculate what your time would be worth per hour based on the number of students. Try to use the Excel data table feature showing the profits based on the number of students. If you are unfamiliar with data tables, just repeat the calculations for each possibility of 10, 20, 30, 40, 50, and 60 students. Put your results on one page, highlighting the profits for each scenario and what your time is worth.

3. Suppose your organization is deciding which of the four projects to bid on. Information on each is in the table below. Assume that all up-front investments are not recovered, so they are shown as negative profits. Draw a diagram and calculate the EMV for each project. Write a few paragraphs explaining which projects you would bid on. Be sure to use the EMV information and your personal risk tolerance to justify your answer.

Project Chance of Outcome Estimated Profits
Project #1 50 Percent
50 Percent \$120,000
-\$50,000
Project #2 30 Percent
40 Percent
30 Percent \$100,000
\$50,000
-\$60,000
Project #3 70 Percent
30 Percent \$20,000
-\$5,000
Project #4 30 Percent
30 Percent
20 Percent
20 Percent \$40,000
\$30,000
\$20,000
-\$50,000

4. Suppose your company is trying to decide whether it should buy special equipment to prepare some of its high-quality publications itself or lease the equipment from another company. Suppose leasing the equipment costs \$240 per day. If you decide to purchase the equipment, the initial investment is \$6,800, and operations will cost \$70 per day. After how many days will the lease cost be the same as the purchase cost for the equipment? Assume your company would only use this equipment 30 days. Should your company buy the equipment or lease it?

5. Draft the source selection criteria that might be used for evaluating proposals for providing laptops for all student, faculty, and staff at your college or university. Include at least five criteria, and make the total weights add up to 100. Write a one-to-two-page paper explaining and justifying the criteria and their weights.

See attached file for full problem description.

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Solution Summary

This solution tackles a lot of project management problems, from cost management to time management and others. A very detailed explanation is provided for all the parts of the question.

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Saurabh Bansal, MBA

Rating 4.9/5

Active since 2003

BE, Thapar Institute of Engg and Technology
MS, Texas A&M University - College Station
MBA, University of Texas at Austin

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