You work as a Project Manager for Media Perfect Inc. Several projects are running under your supervision. Rick, team leader of a project, provides you performance indexes of his project. The…

Question

Options

• AProject is behind the schedule.
• BCosts are higher than planned.
• CProject is right on target.
• DProject is ahead of the schedule.

• A
  3% (1)
• B
  3% (1)
• C
  7% (2)
• D
  87% (26)

Explanation

According to the question, the schedule variance (SV) of the project is 25, which is a positive value. The positive SV depicts that the project is ahead of the planned schedule. What is SV? Schedule variance (SV) is a measure of schedule performance on a project. The variance notifies that the schedule is ahead or behind what was planned for this period in time. The schedule variance is calculated based on the following formula: SV = Earned Value (EV) - Planned Value (PV) If the resulting schedule is negative, it indicates that the project is behind schedule. A value greater than 0 shows that the project is ahead of the planned schedule. A value of 0 indicates that the project is right on target. Answer option A is incorrect. The negative SV means that project is behind the schedule. Answer option C is incorrect. The zero SV means that project is right on target. Answer option B is incorrect. This result can be drawn by looking at the cost variance (CV) of the project. What is CV? Cost variance (CV) is a measure of cost performance on a project. The variance notifies if costs are higher than budgeted or lower than budgeted. The cost variance is calculated based on the following formula: CV = Earned Value (EV) - Actual Cost (AC) A positive value means that spending is less than budgeted, whereas a negative value indicates that costs are higher than originally planned for the project.

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