Project Management

Reply Mon 20 Jun, 2011 06:32 pm
You are the project manager of a manufacturing process that produces a component part. You’d prefer that each component part be fabricated using injection molding, but because of capacity constraints, some of the components parts must be milled by a machinist, which is much more costly than injection molding.
The injection molding process is not foolproof, and if the injection molding is not successful, the damaged part is discarded at a complete loss. If the component part milled by a machinist does not meet specifications, it is re-engineered and re-worked by the machinist. Although the part eventually meets specifications, the re-engineering severely slashes the profit per component part.
A milled component part will always meet specifications, but because milling is expensive, you would like to perform injection molding, even though this is not 100% successful.

You have been given 5 weeks to produce a batch of 1,000 of these component parts with a total budget of $1,000,000. After three weeks, a project report is completed and it indicates that 700 of the component parts were manufactured at a total cost of $770,000. Based off this information, calculate the:

• Budget @ Completion (BAC)
• Planned Value (PV)
• Actual Cost (AC)
• Earned Value (EV)
• Cost Variance (CV)
• Schedule Variance (SV)
• Cost Performance Index (CPI)
• Schedule Performance Index (SPI)
• Estimate @ Completion (EAC)
• Estimate to Complete (ETC)
• Variance @ Completion (VAC)

After three weeks, is this project successful?
Why or why not?
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Reply Mon 20 Jun, 2011 06:34 pm
Do I get a raise if I get the answers right?
Reply Mon 20 Jun, 2011 06:43 pm
No kidding huh, seems pretty complicated for a homework assignment...
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Reply Mon 20 Jun, 2011 07:26 pm
Hmmm. Project is 70% complete and has eaten up 77% of the budget. You're only in line for a big raise if you're CEO of a major corporation.
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Reply Mon 20 Jun, 2011 07:27 pm
PS: I had my own issues with Cost and Managerial Accounting. YOYO, which is a verbal shorthand for You're On Your Own.
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