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1 Using Formula 12. New time = 8 weeks / 0.80 = 10 weeks. You will finish 2 weeks late. Using Formulas 6 and 7, SV(%) = and CV%) = . This indicates that you are behind schedule by 20% and over budget by 12.5%. CV(%) is used fre- quently for status reporting, especially if your company's project management meth- odology requires that an exception report be prepared if you are above or below a certain financial envelop, but SV(%) has limitations. Although a negative SV(%) indicates that you are behind schedule, it may be the result of activities that are not on the critical path and the original end date may still be workable. If you prepared a schedule where activities that were not on the critical path were assumed to start as early as possible, you could be using up slack without altering the critical path. Assuming you have 16 offices left to complete, EAC = $27,000+ $16,000, or $43,000. This is $2000 less than your answer to Question 7 and probably closer to the true EAC. The main issue is in the determinate of EV for raw materials. EV can be calculated when the materials are ordered, when they are received, when they are placed in inven- tory, when they are used, or when they are paid for. The number of choices for calcu- lating EV makes it a little complicated for standard earned value calculations Estimating the Budget at Completion Questions A company is undertaking a project internal to their organization. Only one functional department will be involved the function manager has 10,000 hours will be required to complete the work. The project is scheduled to begin in two weeks. The functional manager states that he has six people already selected to be assigned to your project, and their average hourly pay rate is $44.80. The functional pay grade system for the department is shown below. The overhead rate for this department is 125%. 79 Pay Grade 6 7 Number of Employees 4 Low End of Pay Grade $31.40 $36.55 $44.90 $50.65 High End of Pay Grade $41.50 $48.75 $52.70 $62.33 Average Pay Grade Salary $36,20 $45.40 $49.10 $58.25 7 5 8 9 6 1. What is the fully burdened cost for completing the 10,000 hours of work? 2. Senior management has approved the budget for your project according to your answer to Question 1. Unfortunately, the start date of the project had been delayed by three months and the functional manager does not know whom he will be able to assign. How will you now price out the 10,000 hours? 3. Assume the functional manager tells you that he will assign two Grade 6 workers, two Grade 7 workers, and two Grade 8 workers but is unsure exactly who they will be. How will you price out the 10,000 hours now? 4. Assume that the functional manager tells you that he will assign Grade 8 and Grade 9 workers only, but is not sure about how many from each of the pay grades. How will you price out the 10,000 hours now? 5. If you compare your answers to the above four questions, what are your conclusions