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Company xyz is a company that manufactures telecommunications equipment and
provides support services to the Telecommunication operators globally. It concentrates
on being able to design, manufacture, deliver and provide project management services to
its key customers in Malaysia. The company provides Technical Support services with a
work force of about 150 engineers and support staff, either permanent employees or
through subcontractors engaged in projects.
At present, company xyz is planning to move its office to a bigger and more strategic
location in order to serve its customers better. This is due to the fact that the company is
growing exponentially and the current working space is insufficient. The need of a larger,
more modern facility to accomplish business goals for the future is pressing. The moving
contract was signed one month ago and is expected to be implemented in the next few
weeks.
You were hired six months ago as a project manager and have spent the past few months
getting acclimatized by shadowing more experienced project managers and learning
company procedures.
Prepare the following key deliverables of the project plan.
a) Construct Network Diagram. Perform CPM analysis and the calculation of LS,
EF, ES, LF, and TF based on Table 1. Identify the activities on the critical path.
(12 marks)
Company XYZ contract’s objective is to move its office to a bigger and more strategic location
in order to serve its customer better. Since the company has committed itself to the moving
project, project planning and scheduling must be constructed. The project management plan is
a concise document that can be distributed to all members of the project team. This is a process
of choosing the method and the work order (procedure) to be performed for the project to be
completed. The key questions that must be answered during project planning are (Lester,
2014):
What are the specific work packages need to be done?
How the work packages can be implemented?
Where it should be carried out?
Whom should be responsible for it?
When should the work order need to be started and finished?
According to British Standard Institution (BSI), a model project management plan must include
a bar chart and network under Programme Management section to answer the question of
when the project and work packages have to be started and finished (BSI, 2010).
Network method for project planning and scheduling is a tool used to explicitly show the
relationships among activities or the effects of delaying activities and shifting resources on the
overall project. Network methods are preferable over Gantt chart when the inter-dependencies
between activities and the resource allocations need to be clearly presented. With network
methods, alternative schedule can be quickly analyzed to satisfy the project constraints
(Nicholas & Steyn, 2008).
Two common methods for network diagrams are activity-on-arrow (AOA) and activity-on-
node (AON). Based on Table 1, the nodes in the network diagram would represent events for
AOA and activities with the time details for AON while the arrow represents activity and
logical linkages respectively.
Table 1
ID Activity IPA Duration(days)
A Plan move - 20
B Kickoff meeting A 1
C Select furniture B 25
D Prepare office B 20
E Set up utilities A 30
F Install new signs B 15
G Complete internal
construction
A 45
H Install new
furniture/computers
C,G 10
I Move/relocate D, H,E 5
J Close out project F,I 5
In practice, AON is preferable compared to AOA as it form the basis for Critical Path Method
(CPM). Consequently, only AON method will be constructed and presented for Table 1.
In order to construct AON for Table 1, the logical relationship between activities must be
established accordingly. This can be identified from Table 1’s Immediately Preceding Activity
(IPA). At the same time, each activity’s successors can be determined as well as which
activities can be done at the same time. Using AON, Figure 1.1 shows the network diagram
representing Table 1 project plan.
Figure 1.1 Network Diagram representation for Table 1
From Figure 1.1 it can be shown that each activity’s IPA is a mandatory activity that cannot be
reversed except for activity A which does not have IPA. Similarly, several activities can be
conducted in parallel such as activity B, G and E as well as activity F, D and C. The sequence
of activities that can be conducted at the same time is discretionary given that the mandatory
activity precedes them is conducted first. It also clear that the project have a specific “start” and
“end” activity where the project start with activity A and finish when activity J is completed.
One of the network diagram greatest strength is its ability to provide a good estimation of the
project duration, scheduling of the activities within the project, and making commitments
regarding the due date of a project (Nicholas & Steyn, 2008). By drawing a more detail
network diagram consisting of each activity’s Earliest Start (ES), Earliest Finish (EF), Latest
Start (LS), Latest Finish (LF) and Total Float (TF), a critical path defined as the longest path
in the network can be identified.
Critical path indicates to the project manager which activities are most critical to completing
the project on time. If any of the activity from the critical path take longer than planned, the
entire project will take longer than expected and vice-versa. The process of determining the
project critical path from the network diagram is called CPM analysis.
Following the procedure of CPM, Figure 1.2 shows the steps taken and the computed value of
ES, EF, LS and LF using forward pass and backward pass method.
Figure 1.2 CPM Procedure
The ES and EF for each of the activity in Figure 1.2 represents the earliest possible times that
the activity can be started and completed respectively. The ES of an activity is taken from the
EF of its immediate predecessors which is obtained by summing its own ES and duration. In
the event that an activity has more than one predecessors such as activity H, the path leading to
that particular activity with the longest path is chosen, i.e. G. By using ES and EF value,
project manager can determine the exact time to start an activity more easily. For example,
activity H could only be carried out on the 65th day despite being one of its predecessor activity
(C) was completed on the 46th day.
Each node/activity in the network diagram can be delayed without delaying the project
depending on the “late times”. By using LS and LF, project manager can delay an activity to
its latest time without compromising the project completion due date. For example, activity E
can be started on 45th day instead of the 20th day without exceeding the due date for the project
completion. By having earliest and latest time to start an activity, project manager can be more
flexible in allocating resources in order to complete the project.
By computing the difference between ES and LS or EF and LF, the amount of allowable
deviation between when an activity must take place at the latest and when it can take place at
the earliest can be determined (Nicholas & Steyn, 2008). Total slack or Total Float (TF)
computed from the difference between ES and LS can be used to identify the critical and non-
critical path. Critical activity is defined as an activity that have zero slack or TF value is equal
to zero. A continuous chain of activities with zero TF from start to end signifies the critical
path. The following table shows the tabulation of ES, EF, LS, LF and TF for each activity.
ID Activity ES EF LS LF TF
A Plan move 0 20 0 20 0
B Kickoff meeting 20 21 39 40 19
C Select furniture 21 46 40 65 19
D Prepare office 21 41 55 75 34
E Set up utilities 20 50 45 75 25
F Install new signs 21 36 65 80 44
G Complete internal
construction
20 65 20 65 0
H Install new
furniture/computers
65 75 65 75 0
I Move/relocate 75 80 75 80 0
J Close out project 80 85 80 85 0
From the tabulated value of TF, it is obvious that the critical path is found out to be A, G, H, I
and J as highlighted. Any delay in any of these activities will cause an overall delay to the
project completion. Nonzero TF value on the other hand signifies the total amount of slack
allowable in the corresponding activities without affecting the project timeliness.
In summary, if sufficient resources are available, then noncritical activities should be started as
early as possible (ES) which will preserve slack time and minimizes the risk that delay in
noncritical activities will cause a project delay.
b) Construct an S-curve and calculate SV, CV, SPI and CPI. Comment on the status
of the project. (Refer to Table 2 and Table 3).
Assume that the ‘Moving Project’ has 10 activities as shown in Table 1.
(10 marks)
S-Curve is a tool used in Earned Value (EV) technique for project monitoring and controlling.
By continuously comparing the quantitative value of the work done with the value of work that
was planned as the baseline, project manager can grasp the progress and performance of the
project and proactively adopting corrective action as necessary.
Specifically, S-Curve compare the budget of the project with its actual cost. Periodic review of
the S-curve provides a good estimate of the project performance in terms of expenditure or
commitments depending on the type of the S-Curve developed.
In order to construct S-Curve for the purpose of EV analysis regarding company XYZ’s
“Moving Project”, data from Table 2 have to be tabulated in such a way that the sum cost of all
work and apportioned effort scheduled to be completed at any given period as specified in the
budget can be computed. As such, work breakdown analysis is used to compute the cumulative
Budgeted Cost of Work Scheduled (BCWS). As shown in Table 2.1, it is assume that the cost
is uniformly distributed over the work day for each activity to obtain the daily direct cost for
BCWS based from the data provided in Table 2 and Table 1.
Table 2 Table 2.1 Work Breakdown Analysis for BCWS
ID Activity BCWS Planned
FinishID
Time (Days)
Total Cost ($)
Daily Direct Cost ($)
A Plan move $5,000 May 10A 20 5000 250.00
B Kickoff meeting $2,000 May 14B 1 2000 2000.00
C Select furniture $3000 June 15C 25 3000 120.00
D Prepare office $20,000 June 24D 20 20000 1000.00
E Set up utilities $30,000 July 1E 30 30000 1000.00
F Install new signs $3,500 July15F 15 3500 233.33
G Complete
internal
construction
$5000 July 15
G 45 5000 111.11H Install new
furniture/comput
ers
$80,000 July 20
H 10 80000 8000.00I Move/relocate $50,000 July 28
I 5 50000 10000.00J Close out
project
$1500 Aug 1
J 5 1500 300.00Total 200,000
Total 200000
Similarly, using the data provided in Table 3 and Table 1 and using the work breakdown
analysis with uniform distribution assumption, the cumulative Budgeted Cost of Work
Performed (BCWP) and Actual Cost of Work Performed (ACWP) can be computed as shown
in Table 3.1 and Table 3.2.
Table 3
Activity BCWS Planned
Finish
Current
status
Actual
Cost
(AC)
Earned
Value
(EV)
Plan move $5,000 May 10 Completed $5,000 $5,000
Kickoff meeting $2,000 May 14 Completed $1,800 $2,000
Select furniture $3000 June 15 Completed $3,000 $3,000
Prepare office $20,000 June 24 60%
Completed
$11,000 $12,000
Set up utilities $30,000 July 1 Completed $36,700 $30,000
Install new signs $3,500 July15 Completed $3,500 $3,500
Complete internal
construction
$5000 July15 90%
complete
$4,000 $4,500
Install new
furniture/computer
s
$80,000 July 20 0 0 0
Move/relocate $50,000 July 28 0 0 0
Close out project $1500 Aug 1 0 0 0
200,000 $60,000
Table 3.1 ACWP work breakdown Table 3.2 BCWP work breakdowm
IdTime
(Days)Actual
Cost ($)Daily Direct
Cost ($) IdTime
(Days)Earned Value
($)Daily Direct
Cost ($)A 20 5000 250 A 20 5000 250B 1 1800 1800 B 1 2000 2000C 25 3000 120 C 25 3000 120D 20 11000 550 D 20 12000 600E 30 36700 1223.33 E 30 30000 1000F 15 3500 233.33 F 15 3500 233.33G 45 4000 88.89 G 45 4500 100H 10 0 0 H 10 0 0I 5 0 0 I 5 0 0J 5 0 0 J 5 0 0
Total 65000 Total 60000
In general, BCWS served as the guideline/baseline on how the project should performed while
ACWP give the project manager the ability to measure how close the actual performance of the
project up to date in term of expenditure. BCWP on the other hand, is useful to project manager
to measure the timeliness of the project against the baseline. The worksheet presented below
tabulate the daily value of BCWS, ACWP and BCWP until the latest review at 15th July.
Table 3.3 Worksheet for constructing S-Curve for Company XYZ’s Moving Project
Days ID
Daily Expense (BCWS)
Cumulative Expense (BCWS)
Daily Expense (ACWP)
Cumulative Expense (ACWP)
Daily Expense (BCWP)
Cumulative Expense
(BCWP)21-Apr A 250 250 250 250 250 25022-Apr A 250 500 250 500 250 50023-Apr A 250 750 250 750 250 75024-Apr A 250 1000 250 1000 250 100025-Apr A 250 1250 250 1250 250 125026-Apr A 250 1500 250 1500 250 150027-Apr A 250 1750 250 1750 250 175028-Apr A 250 2000 250 2000 250 200029-Apr A 250 2250 250 2250 250 225030-Apr A 250 2500 250 2500 250 25001-May A 250 2750 250 2750 250 27502-May A 250 3000 250 3000 250 30003-May A 250 3250 250 3250 250 32504-May A 250 3500 250 3500 250 35005-May A 250 3750 250 3750 250 37506-May A 250 4000 250 4000 250 40007-May A 250 4250 250 4250 250 42508-May A 250 4500 250 4500 250 45009-May A 250 4750 250 4750 250 4750
10-May A 250 5000 250 5000 250 500011-May ~ 0 5000 0 5000 0 500012-May ~ 0 5000 0 5000 0 500013-May ~ 0 5000 0 5000 0 500014-May B 2000 7000 1800 6800 2000 700015-May ~ 0 7000 0 6800 0 700016-May ~ 0 7000 0 6800 0 700017-May ~ 0 7000 0 6800 0 700018-May ~ 0 7000 0 6800 0 700019-May ~ 0 7000 0 6800 0 700020-May ~ 0 7000 0 6800 0 700021-May ~ 0 7000 0 6800 0 700022-May C 120 7120 120 6920 120 712023-May C 120 7240 120 7040 120 724024-May C 120 7360 120 7160 120 736025-May C 120 7480 120 7280 120 748026-May C 120 7600 120 7400 120 7600
27-May C 120 7720 120 7520 120 772028-May C 120 7840 120 7640 120 784029-May C 120 7960 120 7760 120 796030-May C 120 8080 120 7880 120 808031-May C 120 8200 120 8000 120 8200
1-Jun C,G 231.11 8431.11 208.89 8208.89 220 84202-Jun C,E,G 1231.11 9662.22 1432.22 9641.11 1220 96403-Jun C,E,G 1231.11 10893.33 1432.22 11073.33 1220 108604-Jun C,E,G 1231.11 12124.44 1432.22 12505.55 1220 12080
5-JunC
,D,E,G 2231.11 14355.55 1982.22 14487.77 1820 13900
6-JunC
,D,E,G 2231.11 16586.66 1982.22 16469.99 1820 15720
7-JunC
,D,E,G 2231.11 18817.77 1982.22 18452.21 1820 17540
8-JunC
,D,E,G 2231.11 21048.88 1982.22 20434.43 1820 19360
9-JunC
,D,E,G 2231.11 23279.99 1982.22 22416.65 1820 21180
10-JunC
,D,E,G 2231.11 25511.1 1982.22 24398.87 1820 23000
11-JunC
,D,E,G 2231.11 27742.21 1982.22 26381.09 1820 24820
12-JunC
,D,E,G 2231.11 29973.32 1982.22 28363.31 1820 26640
13-JunC
,D,E,G 2231.11 32204.43 1982.22 30345.53 1820 28460
14-JunC
,D,E,G 2231.11 34435.54 1982.22 32327.75 1820 30280
15-JunC
,D,E,G 2231.11 36666.65 1982.22 34309.97 1820 3210016-Jun D,E,G 2111.11 38777.76 1862.22 36172.19 1700 3380017-Jun D,E,G 2111.11 40888.87 1862.22 38034.41 1700 3550018-Jun D,E,G 2111.11 42999.98 1862.22 39896.63 1700 3720019-Jun D,E,G 2111.11 45111.09 1862.22 41758.85 1700 3890020-Jun D,E,G 2111.11 47222.2 1862.22 43621.07 1700 4060021-Jun D,E,G 2111.11 49333.31 1862.22 45483.29 1700 4230022-Jun D,E,G 2111.11 51444.42 1862.22 47345.51 1700 4400023-Jun D,E,G 2111.11 53555.53 1862.22 49207.73 1700 4570024-Jun D,E,G 2111.11 55666.64 1862.22 51069.95 1700 4740025-Jun E,G 1111.11 56777.75 1312.22 52382.17 1100 4850026-Jun E,G 1111.11 57888.86 1312.22 53694.39 1100 4960027-Jun E,G 1111.11 58999.97 1312.22 55006.61 1100 5070028-Jun E,G 1111.11 60111.08 1312.22 56318.83 1100 5180029-Jun E,G 1111.11 61222.19 1312.22 57631.05 1100 5290030-Jun E,G 1111.11 62333.3 1312.22 58943.27 1100 540001-Jul E,F,G 1344.44 63677.74 1545.55 60488.82 1333.33 55333.332-Jul F,G 344.44 64022.18 322.22 60811.04 333.33 55666.66
3-Jul F,G 344.44 64366.62 322.22 61133.26 333.33 55999.994-Jul F,G 344.44 64711.06 322.22 61455.48 333.33 56333.325-Jul F,G 344.44 65055.5 322.22 61777.7 333.33 56666.656-Jul F,G 344.44 65399.94 322.22 62099.92 333.33 56999.987-Jul F,G 344.44 65744.38 322.22 62422.14 333.33 57333.318-Jul F,G 344.44 66088.82 322.22 62744.36 333.33 57666.649-Jul F,G 344.44 66433.26 322.22 63066.58 333.33 57999.97
10-Jul F,G 344.44 66777.7 322.22 63388.8 333.33 58333.311-Jul F,G,H 8344.44 75122.14 322.22 63711.02 333.33 58666.6312-Jul F,G,H 8344.44 83466.58 322.22 64033.24 333.33 58999.9613-Jul F,G,H 8344.44 91811.02 322.22 64355.46 333.33 59333.2914-Jul F,G,H 8344.44 100155.46 322.22 64677.68 333.33 59666.6215-Jul F,G,H 8344.44 108499.9 322.22 64999.9 333.33 59999.9516-Jul H 8000 116499.9 0 017-Jul H 8000 124499.9 0 018-Jul H 8000 132499.9 0 019-Jul H 8000 140499.9 0 0 20-Jul H 8000 148499.9 0 021-Jul ~ 0 148499.9 0 022-Jul ~ 0 148499.9 0 023-Jul ~ 0 148499.9 0 024-Jul I 10000 158499.9 0 025-Jul I 10000 168499.9 0 026-Jul I 10000 178499.9 0 027-Jul I 10000 188499.9 0 028-Jul I,J 10300 198799.9 0 029-Jul J 300 199099.9 0 030-Jul J 300 199399.9 0 031-Jul J 300 199699.9 0 01-Aug J 300 199999.9 0 0
Table 3.3 worksheet provide a complete dataset for plotting the S-Curve. Figure 2.0 shows the
plotted S-Curve for EV analysis.
21-Apr
25-Apr
29-Apr
3-May
7-May
11-May
15-May
19-May
23-May
27-May
31-May
4-Jun
8-Jun
12-Jun
16-Jun
20-Jun
24-Jun
28-Jun
2-Jul
6-Jul
10-Jul
14-Jul
18-Jul
22-Jul
26-Jul
30-Jul
$0
$50,000
$100,000
$150,000
$200,000
$250,000
15-Jul; 108499.9
15-Jul; 64999.9
15-Jul; 59999.95
S-Curve for Company XYZ's Moving Project
BCWS ACWP BCWP
Figure 2.0 S-Curve for Company XYZ’s Moving Project
From Figure 2.0, the project scheduled variance (SV), cost variance (CV), scheduled
performance index (SPI) and cost performance index (CPI) at 15th July can be computed as
follows:
ScheduleVariance ( SV )=BCWP−BCWS
¿60000 – 108500
¿−48500
Cost Variance (CV )=BCWP−ACWP
¿60000−65000
¿−5000
Schedule Performance Index (SPI )=BCWPBCWS
¿ 60000108500
¿0.5530
Cost Performance Index (CPI )= BCWPACWP
¿ 6000065000
¿0.9231
A negative value SV and SPI value less than 1 indicates the project is behind the schedule. SV
and SPI value only give project manager an overall indicator that the project is behind the
schedule but cannot pin point the problematic activities that caused the delay. Closer
examination upon each work package is required for a more comprehensive result.
Upon examining the work package closely, it’s clear that activity D and G are the reason for a
low amount of BCWP and SPI. Specifically, activity D and G had used up its allocated
duration for its completion but only managed to accomplished 60% and 90% completion
accordingly. In order to have a more comprehensive look on the reason for activity D and G
delay, the planned finished date given in Table 2 is compared with the network diagram
resulting the following network diagram shown in Figure 3.0.
Figure 3.0 Network Diagram in terms of date
Assuming the planned due date for activity A as the starting point, we can compute the ES, EF,
LS and LF for each activity as shown in Figure 3.0. By comparing Figure 3.0 with each
activity planned finish date, it is clear that the planned finish date given in Table 2 does not
correspond to the network diagram project planning. In particular, activity G was started way
too late compared to LS date. Furthermore, activity G is on the critical path that would affect
the entire project timeliness. Although activity F is not on the critical path, missing its LS date
effectively delaying the project completion. In fact, activity H, I and J finished plan in Table 2
which are on the critical path also does not correspond to the plan laid by the network diagram.
Also, a peculiar situation arise where according to Table 1, activity J must be completely
preceded by activity I, however in Table 2, activity I and J overlapped by one day. In practice,
this situation might cause a significant problem in term of resource allocation.
Negative value CV and CPI value less than 1 indicates that the project suffers from cost
overrun. Examining the work packages revealed that activity E has a significant cost overrun.
However, the CV value might be misleading due to the exclusion of overhead.
In summary, the cause of the delay and cost overrun might have been due to improper project
scheduling resulting in underutilizing the resources the company allocate for the project. Given
the current status, the project cannot recover from the delay and cost overrun especially when
activity G is on the critical path without changing the plan or work packages.
Bibliography
BSI, B. S. (2010). 6079-1: 2010 Project management. Principles and Guidelines for the Management of Projects.
Lester, A. (2014). Project Management, Planning, and Control (Sixth Edit.). Elsevier Ltd.
Nicholas, J., & Steyn, H. (2008). Project Management for Business, Engineering and Technology. Technology (Thrid Edit.). Elsevier Inc.