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Author: Academic Office, Faculty of Design and Creative Technologies Page 1 of 14

Subject: DCT Individual Assessment Cover Sheet
Version 7.0 Issue Date: 19/04/2017 Last Updated: 17/02/2022
COMP507- ITPM Semester 1 2024

ASSIGNMENT #2 (100 marks)

Contribution to final marks: 50%
Must get a minimum of 35/100 marks in this assignment to get an overall pass for this paper

Submission Requirements:
 This is an individual assignment. The cover page must have your ID number and Name (in full)
 Please use 1.5-line spacing and 12-point font (no handwritten assignment will be marked except for
drawing the AOA diagram)
 Include page numbers.

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COMP507- ITPM Semester 1 2024

Task1: Project Cost Control (30 marks)

You are required to control the budget for the MYH project. Below is the Business Case of the
project.

1.1 What is the total budget at completion (BAC) for the project? (3 marks)

BAC is the total budget for the project. It can be calculated as follows:
BAC = PV + AC
BAC = $400,000 (PV) + $600,000 (AC) = $1,000,000.

1.2 Explain a likely reason for the difference between PV and AC for the first week of this
project. (5 marks)

The fact that the amount paid for PV is higher than the amount spent on AC also means that the
above cost was exceeded in the first week.

•A possible explanation of why the predicted costs were higher than the budget costs could be that
the actual costs were higher than the planned values for the works accomplished in the first week.
•This may be because of various factors such as unanticipated expenditures or costs incidents or as
a result of low productivity.

The plausible explanation for PV to be less than the work done in the first week and therefore, the
AC is that the amount of money effectively spent on the work done (actual cost) is more than the
planned amount (planned value). This indicates that the first week’s plan exceeds the project
budget.

1.3 Calculate the cost variance (CV) and the cost performance index (CPI) for the first week of
this project. Is the project under or over budget? (7 marks)

Cost Variance (CV) and Cost Performance index (CPI) are as follows:
CV=EV-AC
CPI = EV/ AC

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COMP507- ITPM Semester 1 2024

Data:
EV = $250,000
AC = $600,000
CV = $250,000-$600,000
CV= -$350,000
A negative cost variance indicates that the project is overbudget.

CPI = $250,000/ $600,00

CPI = 0.417
CPI less than 1 means that the cost is overrun.

•The negative CV of -$350,000 shows that the project is over budget for the first week and the the CPI
of 0.4167 shows that the project is performing at 41.67% of the budgeted efficiency.

1.4 Calculate the schedule variance (SV) and the schedule performance index (SPI) for the first
week of this project. Is the project ahead of or behind schedule? (7 marks)

SV= EV – PV
SPI = EV/PV

Data:
PV (planned Value) = $400,000
EV (earned value) = $250,000

SV= $250,000 - $400,000

SV= - $150,000
(negative means behind schedule)

SPI= $250,000/ $400,000

SPI= 0.625
(less than 1 indicates behind schedule)

The negative SV of -$150,000 shows that the project is behind schedule for the first week.

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COMP507- ITPM Semester 1 2024

•The SPI of 0.625 shows that the project is progressing at 62.5% of the planned rate.

1.5 Calculate the new estimate at completion (EAC) for this project after the completion of the
first week’s work. (4 marks)

EAC is an estimate of the total project cost based on the current project performance. There are
various methods to calculate EAC, but in this case, we'll use the Cost Performance Index (CPI):

EAC = BAC/ CPI

Estimate at completion = total budget at completion / cost performance index

Data:
BAC( budget at completion) = $100,000
CPI ( cost performance index) = 0.4176
EAC= $1,000,000/ 0.4167
EAC= $2399,995.6

1.6 Calculate how long it will now take to finish this project after working on the project for a
week. (4 marks)

To find the estimated time it will take to finish the project, you can use the SPI:

Time to Finish the project = Original Planned Duration / SPI

Assuming the original planned duration is 100 weeks:
Time to Finish the project = 100 weeks / 0.625 = 160 weeks.

In order to calculate the estimated time to finish the project, we will use use the Schedule Performance
Index (SPI) as follows:
Estimated Project Duration = Original Project Duration / SPI
Assuming the original project duration is not provided, calculate it as follows:

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COMP507- ITPM Semester 1 2024

Original Project Duration = Total Planned Cost (BAC) / Planned Rate(PV per week)
Data:
BAC (Total Budget at Completion) = $1,000,000 PV (Planned Value) per week = $1,000, 000 (same
as BAC)
Assuming the original planned duration is 100 weeks:

Time to Finish = 100 weeks / 0.625 = 160 weeks.

Task 2: Project schedule development (35 marks)

3.1 Complete the PERT estimation to show the duration of each activity. (10 marks)

Pert estimation = (Optimistic Duration + Most Likely Duration * 4 + Pessimistic Duration) / 6

A = (12 + 4*14 + 26)/6 = 16.1667

B = (14 + 4*18 + 24)/6 = 18.33

C = (21 + 4*23 + 32)/6 = 24.166

D = (12 + 4*17 + 26)/6 = 17.67

E = (11 + 4*13 + 16)/6 = 13.16

F = (16 + 4*19 + 21)/6 = 18.83

G = (8 + 4*6 + 11)/6 = 7.16

H = (6 + 4*4 + 12)/6 = 5.67

I = (8 + 4*6 + 13)/6 = 7.5

J = (8 + 4*7 + 16)/6 = 8.67

K = (9 + 4*7 + 13)/6 = 8.33

L = (10 + 4*8 + 12)/6 = 9

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COMP507- ITPM Semester 1 2024

3.2 Draw the network diagram (AOA) to show the order in which all the activities will be
undertaken in this project. The diagram must be clearly labelled. (5 marks)

3.3 List all the possible paths for this project with their total durations. (4 marks)

1. A – C – E – I – L

= 19+24+9+6+5

= 63

2. A – D – F – I – L

= 19+17+9+6+5

= 56

3. B – G – I – L

= 16+6+6+5

= 33

4. B – H – J – K – L
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COMP507- ITPM Semester 1 2024

= 16+6+5+6+5

= 38

3.4 Clearly identify and briefly explain the critical path for this project. (10 marks)

Critical path in project management is defined as the linear progression of activities or tasks which
forms the longest chain that defines possible minimum time that can take for a project to be
completed. It is the longest path through which activities are sequenced in the project network
diagram and any activity that takes place on this path will slow down the project and increase the
overall time. When it comes to calculating the critical path, there is a requirement to examine the
network diagram of the project and find out what activities will take the most time. In this case, we
are given four different sequences of activities:In this case, we are given four different sequences
of activities:

1. A – C – E – I – L

2. A – D – F – I – L

3. B – G – I – L

4. B – H – J – K – L

To determine the critical path, we need to calculate the total duration of each sequence. The
durations are given as follows:

1. A – C – E – I – L = 19 + 24 + 9 + 6 + 5 = 63

2. A – D – F – I – L = 19 + 17 + 9 + 6 + 5 = 56

3. B – G – I – L = 16 + 6 + 6 + 5 = 33

4. B – H – J – K – L = 16 + 6 + 5 + 6 + 5 = 38

The critical path is the sequence with the longest duration. In this case, the critical path is
sequence 1, A – C – E – I – L, with a total duration of 63 days.

3.5 This network is expected to be up and running within 4 months from the time the work on
the project is started. Does this opening date appear feasible? Justify with your calculations.
(6 marks)

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COMP507- ITPM Semester 1 2024

To determine whether the opening date of 4 months from the start of the project appears feasible,
we need to calculate the earliest start date for the project and compare it to the expected opening
date. From the given table, we can construct the network diagram using the AOA technique. The
earliest start date for the project is determined by the earliest start time of the first activity, which
is A with an optimistic duration of 12 days. Therefore, the earliest start date for the project is 12
days.

This is a critical path of the project because if each of these activities is accomplished in order, it
will take a longer time for the whole project to be completed. In sequence one, the critical path is
depicted as follows: School year A – C – E – I – L to tallying the 63 days of school year. To
standardize it in order that we can decide if opening the project 4 months later is feasible for the
beginning of the project, we accustom the expected completion date through the utilization of the
critical path. Vasiliu et al., has stated that the total critical path is 63 days ; which means that the
project should take about sixty-three days to complete, once the project has started. Since the work
started on the 12 th of a month, one can estimate and even project that the project work is also
likely to take, 12 + 63 = 75 days. Since 4 months can be equal to 120 days, the expand the
opportunity of developing the opening date 4 months ahead from the start of the work on the
project is not that unreasonable. Therefore, assuming the figures given above, having an opening
date of 4 months from the start of the project seems achievable.

This is because the critical path take 63 days which is slightly over two months, if no interruption
is observed in the activities the management intends to have the network in place in the expected 4
months this is because 4 months is ample time as compared to the critical path time which is 63
days or 2 months.

Task 3: Project selection (15 marks)

3.1 Explain the order in which these 4 projects should be undertaken. Justify with your
calculations. (5 marks)

In order to determine the order in which the projects should be undertaken, calculation of the weighted
scores for each project based on the criteria provided. Then, we will rank the projects according to
their weighted scores to determine the priority order.

Calculating the Weighted Scores

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COMP507- ITPM Semester 1 2024

The weighted scores are calculated by multiplying the score for each criterion by its corresponding
weightage and then summing these products across all criteria. The weights are given as follows:

 The availability of a principal engineer (a): 20%

 Development team assigned based on at least 4 senior software engineers with local
development experience (b): 20%
 Availability of a product manager as an on-site customer (c): 20%
 Support for the project from the sales and marketing team (d): 20%
 Availability of an agile tester (e): 10%
 An established product backlog based on high-level requirements (f): 10%

The weighted scores for each project are calculated as follows:

Project 1:

 a= 65 * 0.2 = 13
 b= 45 * 0.2 = 9
 c= 45 * 0.2 = 9
 d= 60 * 0.2 = 12
 e= 55 * 0.1 = 5.5
 f= 60 * 0.1 = 6

Total: 13 + 9 + 9 + 12 + 5.5 + 6 = 54.5

Project 2:

 a= 70 * 0.2 = 14
 b= 65 * 0.2 = 13
 c= 55 * 0.2 = 11
 d= 65 * 0.2 = 13
 e= 85 * 0.1 = 8.5
 f= 70 * 0.1 = 7

Total: 14 + 13 + 11 + 13 + 8.5 + 7 = 66.5

Project 3:

 a= 75 * 0.2 = 15

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COMP507- ITPM Semester 1 2024

 b= 70 * 0.2 = 14
 c= 75 * 0.2 = 15
 d= 75 * 0.2 = 15
 e= 85 * 0.1 = 8.5
 f= 50 * 0.1 = 5

Total: 15 + 14 + 15 + 15 + 8.5 + 5 = 73.5

Project 4:

 a= 60 * 0.2 = 12
 b= 70 * 0.2 = 14
 c= 75 * 0.2 = 15
 d= 75 * 0.2 = 15
 e= 85 * 0.1 = 8.5
 f= 70 * 0.1 = 7

Total: 12 + 14 + 15 + 15 + 8.5 + 7 = 72

Ranking the Projects

The projects are ranked in order of their weighted scores as follows:

Project Weighted Score

Project 3 73.5

Project 4 72

Project 2 66.5

Project 1 54.5

Based on the weighted scores, the order in which the projects should be undertaken is:
Page 12 of 14
COMP507- ITPM Semester 1 2024

1. Project 3

2. Project 4

3. Project 2

4. Project 1

This order is justified by the calculations, where Project 3 has the highest weighted score due to its
strong performance across all criteria, particularly in the availability of a principal engineer and
support from the sales and marketing team.

Task 4: Project selection (20 marks)

4.1 Based on the information provided below, perform a quantitative risk analysis using a
decision tree diagram to calculate the expected monetary value (EMV) and contingency
reserve for each project. (10 marks)

EMV Calculation for Project 1

 Outcome 1: Risk 1 occurs (40% * -$60,000) = -$24,000

 Outcome 2: Risk 2 occurs (60% * -$70,000) = -$42,000

Contingency reserve (Project 1) = -$24,000 + -$42,000 = -$66,000

EMV Calculation for Project 2

 Outcome 1: Risk 1 occurs (20% * -$100,000) = -$20,000

 Outcome 2: Risk 2 occurs (25% * $60,000) = $15,000
 Outcome 3: Risk 3 occurs (55% * $80,000) = $44,000

Contingency reserve (Project 2) = -$20,000 + $15,000 + $44,000 = $39,000

EMV Calculation for Project 3

 Outcome 1: Risk 1 occurs (40% * $60,000) = $24,000

 Outcome 2: Risk 2 occurs (25% * $75,000) = $18,750
 Outcome 3: Risk 3 occurs (55% * -$30,000) = -$16,500

Contingency reserve (Project 3) = $24,000 + $18,750 - $16,500 = $36,250

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COMP507- ITPM Semester 1 2024

EMV Calculation for Project 4

 Outcome 1: Risk 1 occurs (20% * $60,000) = $12,000

 Outcome 2: Risk 2 occurs (35% * $40,000) = $14,000
 Outcome 3: Risk 3 occurs (25% * -$80,000) = -$20,000

Contingency reserve (Project 4) = $12,000 + $14,000 - $20,000 = $6,000

4.4 Explain the contingency reserve for each project. Justify with your calculations. (10 marks)

The contingency reserve for each project acts as a buffer against cost overruns due to potential
risks. While the Expected Monetary Value (EMV) provides a general financial outlook, the reserve
accounts for uncertainties. The contingency reserve serves as a safety net for each
project, acknowledging the inherent uncertainties associated with risk probabilities and
impacts. Projects with positive EMVs, like Projects 2, 3, and 4, can benefit from a contingency
reserve calculated as a percentage of the EMV to manage these general
uncertainties. However, Project 1's negative EMV indicates a higher risk of cost overruns. For this
project, a more targeted contingency reserve focusing on the most impactful risk (e.g., Risk 2) might
be necessary to mitigate potential cost overruns exceeding the expected value.Ultimately, the
approach for determining the contingency reserve amount depends on the project's specific risk profile
and risk tolerance.

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