Example 13.

The progress observed at the end of the 7th day from the beginning of a 12-day duration
project is given in Table 13.8. The actual cost incurred till date is reported to be Rs. 3,100.00

Draw a Gantt chart for the project and find the project performance on the basis of cost and
schedule performance indices. (Assume the activity costs are incurred uniformly over its
duration).

Estimated % of
Immediate Budget of
Activity Duration in Completion at
Predecessor Activity (Rs.)
Days End of 7 Days
A - 3 600 100
B - 1 200 100
C A 4 800 75
D B 4 700 100
E B 5 500 95
F D 2 200 80
G E 3 500 50
H C 4 400 0
I F 2 600 0
J G 3 300 0
Table 13.8 Project-related details (MMS, VI Sem, Mumbai Univ 2003,2012)
Solution:

We have to construct the network, find the ES and EF for all activities and estimate the
duration of the project.

Path 1: A – C – H, duration = 11 days

Path 2: B – D – F – I, duration = 9 days

Path 3: B – E – G – J, duration = 12 days

Path 3 is the longest duration path and hence the critical path. The budgeted project
duration is 12 days.

% of
Immediate Budgeted
Duration Completion
Activity Predecesso ES EF cost of BCWS BCWP
in Days at End of 7
r Activity
Days
A - 3 0 3 600 100 600 600
B - 1 0 1 200 100 200 200
C A 4 3 7 800 75 800 600
D B 4 1 5 700 100 700 700
E B 5 1 6 500 95 500 475
F D 2 5 7 200 80 200 160
G E 3 6 9 500 50 167 250
H C 4 7 11 400 0 - -
I F 2 7 9 600 0 - -
J G 3 9 12 300 0 - -
Total 4,800 3,167 2,985
 Figure 13.3 Gantt chart at the end of the 7 th day

The budgeted cost for the work scheduled is Rs. 3,167

The budgeted cost for work performed is Rs. 2,985

The actual cost of work performed is Rs. 3,100 (data given in the problem).

BCWP 2,985
Cost performance indices (CPI) = = = 0.96
ACWP 3,100

BCWP 2,985
Schedule performance indices (CPI) = = = 0.94
BCWS 3,167

Cost of completion = Budgeted cost / CPI = 4,800/0.96 = Rs. 5,000

Time of completion = Scheduled duration/SPI = 12/0.94 = 12.76 ≈ 13 days.

Problem 13.8

A project consisting of eight activities was reviewed on completing of 12 days after its start.
Find the project performance on the basis of cost and schedule performance indices. What
is the estimated duration of the project?

Actual %
Budgeted Cost Actual Cost (Rs. Completion at
Activity Duration (Days)
(Rs. ‘000) ‘000) the End of Day
12
A1–2 5 60 62 100
B2–3 7 70 70 100
C2–4 5 75 73 100
D2–5 7 82 70 90
E3–6 6 69 0 0
F4–6 8 54 10 20
G5–7 6 50 0 0
H6–7 5 40 0 0
Table 13.10 Activity related details (MMM, VI SEM, Mumbai Univ 2007)
Solution:

We will have to construct the network (Figure 13.4) and identify the critical path to know
the project duration.

Path 1: A – B – E – H, 23 Days

Path 2: A – C – F – H, 23 Days

Path 3: A – D – G, 18 Days

The project duration is 23 days. The evaluation of the ES and EF times is as shown in Table
13.11.

Actual Actual %
Budgeted
Duration Cost Completion
Activity ES EF Cost (Rs. BCWP BCWS
in Days (Rs. at the End
‘000)
‘000) of Day 12
A1–2 5 0 5 60 62 100 60 60
B2–3 7 5 12 70 70 100 70 70
C2–4 5 5 10 75 73 100 75 75
D2–5 7 5 12 82 70 90 73.8 82
E3–6 6 12 18 69 0 0 0 0
F4–6 8 10 18 54 10 20 10.8 13.5
G5–7 6 12 18 50 0 0 0 0
H6–7 5 18 23 40 0 0 0 0
Total 500 285 289.6 300.5
Table 13.11 Project activity-related details

Notes:
 1. BCWP is the percentage of the budgeted cost converted into actual work or the
earned value.
2. BCWS is the budgeted cost of work that should be performed up to the day of review
i.e., 12. In case of activity F, up to day 12, 2 days (out of a total 8 days) should be
54
completed as per schedule. Hence, BCWS for activity F is ( x 2 = days) = 13.5.
8

Budgeted cost of work performed = 289.6

Budgeted cost of work scheduled = 300.5

Actual cost of work performed = 285

BCWP 289.6
CPI = = = 1.02
ACWP 285

BCWP 289.6
SPI = = = 0.96
BCWS 300.5

The project is delayed but is working within the cost estimates. The estimated project
duration is:

Project duration 23
= = 23.96 ≈ 24 days
SPI 0.96
Example 13.10

The progress observed at the end of the 7th day from the beginning of the project is as given
in Table 13.12.

Actual %
Budgeted Cost Actual Cost (Rs. Completion at
Activity Duration (Days)
(Rs. Lakhs) Lakhs) the End of Day
7

A1–2 3 5 4 100
B2–3 4 8 9 90
C2–4 3 4 5 95
D2–5 8 5 3 60
E3–6 5 3 0 0
F4–6 4 2 1 30
G5–7 5 10 0 0
H6–7 3 7 0 0
Table 13.12 Activity-related details

If the costs are incurred linearly in proportion to activity completion, then find the following:

i) Cost variance
ii) Cost performance index
iii) Scheduled performance index
iv) Estimated cost of project completion
v) Estimated duration of the project

MMM, VI Sem, Mumbai Univ, 2008

Solution:

The first step is to construct the network (Figure 13.5) and identify the critical path to know
the budgeted project duration.

Path 1: A – B – E – H, 15 days.

Path 2: A – C – F – H, 13 days.

Path 3: A – D – G, 16 days.

The project duration is 16 days. The evaluation of the ES and EF times is shown in Table
13.13.

Actual Actual %
Budgeted
Duration Cost Completion
Activity ES EF Cost (Rs. BCWP BCWS
(Days) (Rs. at the End
Lakhs)
Lakhs) of Day 7
A1–2 3 0 3 5 4 100 5 5
B2–3 4 3 7 8 9 90 7.2 8
C2–4 3 3 6 4 5 95 3.8 4
D2–5 8 3 11 5 3 60 3 2.5
E3–6 5 7 12 3 0 0 0 3
F4–6 4 6 10 2 1 30 0.6 0.5
G5–7 5 11 16 10 0 0 0 0
H6–7 3 12 15 7 0 0 0 0
Total 44 22 19.6 23
Table 13.13 Project activity related details
Notes:

1. BCWP is the percentage of the budgeted cost converted into actual work or the
earned value.
2. BCWS is the budgeted cost of work that should be performed up to the day of review
i.e., 7. In case of activity F, up to day 7, 1 day (out of a total 4 days) should be
2
completed as per schedule. Hence, BCWS for activity F is ( x 1 = days) = 0.5.
4

Budgeted cost of work performed = 19.6

Budgeted cost of work scheduled = 23

Actual cost of work performed = 22

i) Cost variance = BCWP – ACWP = 19.6 – 22 = -2.4

BCWP 19.6
ii) CPI = ACWP = 22 = 0.89
BCWP 19.6
iii) SPI = BCWS = 23 = 0.85
Budgeted cost of total work
iv) Estimated cost of project on completion = CPI
44
= 0.89 = 49.43 ≈ 50 lakhs
Project duration 16
v) SPI
= 0.85
= 18.82 ≈ 19 days

Hence, the project is likely to be delayed and completed in 19 days.

Example 13.11

Consider the data given in Table 13.14 for a small project. The actual performance is
measured at the end of 5 months in terms of % actual completion and actual cost incurred.
Assume all activities will begin at the earliest, determine the following:

a) Cost performance index and schedule performance index

b) Revised project duration and cost

% Actual
Activity Predecessor(s) Normal Time Normal Cost Actual Cost
Completion

A - 4 6 6 100
B - 12 15 6 40
C - 4 3 3 95
D A 10 15 2 7
E C 6 10 0 0
F A 14 11 8 7
G B, D, E 8 10 0 0
Table 13.14 Small project data

MMS, IV Sem, Mumbai Univ, 2018

Solution:

a) Although there is no requirement to draw the network diagram for the calculations,
we will as a matter of practice still draw the network diagram as shown in figure
13.6. The Early Start (ES) and Early Finish (EF) besides BCWP and BCWS calculations
are shown in Table 13.15.

CPI = BCWP / ACWP = 16.67 / 25 = 0.67

SPI = BCWP / BCWS = 16.67 / 19.21 = 0.87
b) Revised project cost = Budgeted cost / CPI = 70 / 0.67 = 104.48
Revised project duration = Budgeted duration / SPI = 22 / 0.87 = 25.29 ≈ 26 months

Normal Normal Actual % Actual

Activity Predecessor(s) ES EF BCWP BCWS
Time Cost Cost Completion
A - 4 6 6 100 0 4 6 6
B - 12 15 6 40 0 12 6 6.25
C - 4 3 3 95 0 4 2.85 3
D A 10 15 2 7 4 14 1.05 1.5
E C 6 10 0 0 4 10 0 1.67
F A 14 11 8 7 4 18 0.77 0.79
G B, D, E 8 10 0 0 14 22 0 0
Total 70 25 16.67 19.21
Table 13.15 BCWP and BCWS calculations