Book of Exercises

Answer Key

© Copyright 2019, Project Management Academy Inc, All rights reserved. Project Management Academy® and PMA® are registered trademarks of Educate 360, LLC. V6.1.3. Materials in this document are based on the A Guide to
the Project Management Body of Knowledge, (PMBOK® Guide - Sixth Edition, Project Management Institute Inc., 2017. PMBOK is a registered trademark of the Project Management Institute, Inc. Copyright and all rights reserved.
 Contents
Section 1 - Matching Exercises

Section 2 - Fill In The Blank Exercises

Section 3 - Crossword Puzzles Exercises

Section 4 - Mad Libs Exercises

Section 5 - Earned Value Exercises

Section 6 - Critical Path Exercises

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 Section One

Matching Exercises

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 Matching Exercise 1
Draw a line from the description on the left to the corresponding document on the right

A documented economic feasibility study used WBS Dictionary

to establish validity of the benefits of a selected
component lacking sufficient definition and is
used as a basis for the authorization of further
project management activities.

Authorized, time-phased budget, excluding Requirements Documentation

management reserves used to measure, moni-
tor, and control cost performance of the project

Contains the descriptions of the product or Business Case

business process, business case, goals and
objectives

Shows additional information about work Cost Baseline

packages (e.g. description of work, responsible
person, cost estimate)

Probable cost to complete project activities Project Charter

The description of the project scope, major Requirements Management Plan

deliverables, assumptions, and constraints.

Formal authorization for the project to start Project Scope Statement

How requirements will be planned, tracked,

analyzed, managed and reported.
Activity Cost Estimates

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 Matching Exercise 2
Draw a line from the Process on the left to the corresponding Output on the right.

Define Activities Team Performance Assessment

Identify Stakeholders Scope Baseline

Develop Team Accepted Deliverables

Create WBS Activity List

Estimate Costs Cost Baseline

Validate Scope Stakeholder Register

Define Scope Source Selection Criteria

Determine Budget Activity Cost Estimate

Plan Procurement Verified Deliverables

Control Quality Project Scope Statement

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 Section Two

Fill In The Blank

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 Fill In The Blank Exercise 1
Identify the following Terms

1. The type of organization where the project manager has Projectized Organization
full authority

2. The process where all project work is sub-divided and Create WBS
broken down to the work package level

3. The technique where work packages are broken down to Decomposition

activities

4. Any action taken to bring expected future project Preventive Action

performance in line with the Project Management Plan

5. Starting an activity prior to completing the preceding Lead

activity

6. Delaying an activity’s start date Lag

7. Using a similar prior project to estimate activity durations Analogous Estimating

or cost

8. Using a statistical relationship to estimate cost or duration Parametric Estimating

9. Breaking down an activity into smaller component to make Bottom Up Estimating

a very accurate estimate

10. Adjusting the level of resources when resources have Resource Smoothing
been over-allocated, without allowing the schedule to slip

11. Adjustments made to project expenditure to account for Funding Limit Reconciliation
funding limits

12. Cost of conformance and Non-conformance Cost of Quality

13. Examining the deliverables to ensure the requirements Inspection

are met

14. Tool used to ensure the team is following the quality Quality Audit
procedures as planned

15. Testing multiple factors at a time Design of Experiments

16. Comparing the project or quality against a standard Benchmarking

17. A grid that shows relationships between work packages Responsibility Assignment Matrix (RAM)
(or activities) and team members

18. Uncertain future event Risk

19. The point where seller has to absorb all cost overruns Point of Total Assumption (PTA)

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 Fill In The Blank Exercise 2
Identify the following Terms

1. The 2 schedule compression techniques are:

• Crashing
• Fast-tracking

2. The 2 Monitoring and Controlling Processes in Scope Management are:

• Validate Scope
• Control Scope

3. The lowest level of the WBS is:

• Work Package Level

4. The 4 Group Decision Making Techniques are:

• Majority
• Plurality
• Unanimity
• Autocratic

5. The Process group that has one process:

• Closing Process Group

6. The 5 Conflict Resolution Techniques are:

• Withdraw/Avoid
• Smooth/Accommodate
• Force/Direct
• Compromise/Reconcile
• Collaborate/Problem Solve

7. The 5 stages of team development (Tuckman model):

• Forming
• Storming
• Norming
• Performing
• Adjourning (aka Mourning)

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 Fill In The Blank Exercise 2 Cont.

8 Strategies for negative risk (threat):

• Avoid
• Transfer
• Mitigate
• Accept (can be active or passive)
• Escalate

9. Strategies for positive risk (opportunities):

• Share
• Exploit
• Enhance
• Accept (can be active or passive)
• Escalate

10. Requirements of a contract:

• Offer
• Acceptance
• Capacity
• Consideration
• Legal Purpose

11. The 3 main types of contracts are:

• Fixed Price
• Cost Reimbursable
• Time and Materials

12. The 3 Communication Methods are:

• Interactive
• Push
• Pull

13. 4 types of communication:

• Formal Written
• Formal Verbal
• Informal Written
• Informal Verbal

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 Fill In The Blank Exercise 3
Identify the following Terms

1. A project is a temporary endeavor undertaken to create a unique product

service or result .

2. The 6 most common constraint categories on a project are:

• Scope
• Schedule
• Budget
• Resources
• Risk
• Quality

3. A group of related projects is known as a program whereas a collection of programs, projects

and subprojects is a portfolio

4. The only knowledge area that has processes in all 5 process groups is Integration Management .

5. The two process groups with processes in all 10 knowledge areas are Planning and Monitoring & Controlling .

6. At the beginning of the project stakeholder influence and risk

are high whereas cost of changes and staffing levels are low.

7. The EEF that determines that the correct work is done in the right sequence and by the right team is called a
Work Authorization System

8. Lessons learned, templates, historical data are OPA’s .

9. Corrective actions are actions taken to realign the performance of the project
work with the project management plan.

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 Fill In The Blank Exercise 3 Cont.

10. Scope creep is adding unapproved changes requested by the customer,

whereas adding unapproved features that the customer never requested is gold plating .

11. Scope baseline is made up of

• WBS
• WBS dictionary
• Scope statement
• Work packages
• Planning Packages

12. Work package is the lowest level of the WBS

13. Code of account identifiers are listed in the WBS dictionary

14. The 4 types of dependencies are:

• Mandatory
• Discretionary
• External
• Internal

15. A lead refers to starting a successor activity before completing the current activity, whereas
a lag is a delay in starting the successor activity.

16. 3 point estimate using a simple average is also known as a triangular distribution .

17. Fast tracking and crashing are 2 schedule compression

techniques.

18. A rough order of magnitude estimate ranges from -25% to +75%

19. The 2 types of risk reserves are contingency reserves and management reserves.

20. On a control chart the limits set by the customer are known as specification limits whereas the
limits established by the process are control limits.

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 Fill In The Blank Exercise 3 Cont.

21. As a standard, the control limits are set to plus and minus three standard deviations from the mean

22. The tool used to test multiple factors at a time is Design of Experiments .

23. The quality pioneer that promoted the concept of zero defects was Philip Crosby .

24. The quality pioneer that promoted fitness for use was Joseph Juran .

25. The quality pioneer that said quality problems are a result of management 85% of the time was
W. Edwards Deming .

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 Section Three

Crossword Puzzles

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 Crossword Puzzle Exercise 1
1 2 3
A S H A R E
4 5
C R I T I C A L P A T H S S
6
O C C R A S H I N G T
L U O I
7
O R A C I P M
8 9
C A S T A K E H O L D E R S A
10
A C P P C C I T
11
T O Y R P U S H E
12 13
I N T R A N S F E R K T
15
O T N E E O
N R A P A C
16 17 18
C O S T O F Q U A L I T Y P R E V E N T I O N
L O N A M
C G E C P
19
H O L D L
20
A R E S O U R C E L E V E L I N G E
21
P A R E T O S S A T
R T E S L E
22
O S O U S
23
G P R O J E C T M A N A G E M E N T P L A N
24
G R A D E I S O
A M L N
25 26 27
M C A T E M P L A T E S
P T A E O
28
D E F E C T R E P A I R R F R
F N N
G E
D

ACROSS
2. An example of this risk strategy is a teaming agreement
4. The longest duration path through a network diagram
6. A schedule compression method which exchanges higher costs for
shortened durations
7. An example of a responsibility assignment matrix is a _______ diagram
8. Customers, end users, operational managers, sponsor are all
examples of _________
10. Type of contract with the highest risk for the buyer and the least risk for
the seller
11. An email or voicemail message is an example of this type of
communication method
12. A risk strategy that involves a contract, such as an insurance policy
16. Costs that include training, testing, rework and warranty work
17. These types of costs include training, equipment, time to do it right
20. A resource optimization technique which often can cause the original
critical path to change
21. A type of diagram that shows causes of defects by frequency
23. Should be signed off by project manager, project sponsor, project team
and key stakeholders
24. Category assigned to products or services having the same functional
use but different technical characteristics
26. Using a previous project's activity list as a starting point for your project
is an example of this
28. Used to modify a non-conforming product, following a change request
DOWN
1. Occurs when measured value equals true value
3. Expected costs to finish all the remaining project work
4. A technique that places the entire project team in one physical location
5. Uncontrolled changes result in ______
9. An uncertain event or condition that may have a positive or negative
impact on the project
10. Includes upper and lower control limits and upper and lower
specification limits
13. The least accurate method of estimating
15. Value of the work actually completed
18. The difference between what was budgeted and what is forecasted to
have been spent at the end of the project
19. Knowledge gained during a project which shows how project events
were addressed or should be addressed in the future with the purpose
of improving future performance
21. A collection of related projects that are more beneficial to manage
collectively than individually
22. Responsible for providing funding for the project
25. A type of contract in which the seller is reimbursed all costs and the fee
does not change based on seller's costs
27. Industry standards and market conditions are examples

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 Crossword Puzzle Exercise 2
¹
L
² ³ ⁴ ¹²
2
S E R V I C E O E F
C E P A O
⁵
H R S ⁶C A T T E R D I A G R A M
E I O R M
⁷²¹
D F S A D
F LI O A
L T
⁸
U D I R E C T C O S T S L L
L E O I V A
9
E D F F P O E N
C C N R N
¹⁰
N O R M I N G O S B
A E
¹¹
M N B A L A N C E D
12 ¹³
P F M L V
¹⁵
R D O I A
¹⁶ ¹⁷
E E E R T F L
¹⁸
S C U S T O M E R I O U
¹⁹
S R A G R T E
²⁰
I E I N I T I A T E S H
²¹
O P A C T C R
²² ²³
N S S C H E D U L E B A S E L I N E
E L S A
²⁴
O A T T
S P I
²⁵
I P R E V E N T I O N
N R G
G A
I
²⁶
S B
²⁷
R E S E R V E A N A L Y S I S
L C

ACROSS
2. A project generally produces a new product or ______________
5. A chart that show relationships between 2 variables to identify
correlation and spot trends
7. Is determined by late finish - early finish
8. Costs that are related to producing specific goods or performing a
specific service
9. Type of contract with the highest risk for the seller and the least risk for
the buyer
10. Third stage of team development in Tuckman's ladder
11. In this type of organization the project manager and functional
managers share the authority/power
18. A key stakeholder who will pay for the project’s product or service
20. The approved project charter formally ______ the project
21. Policies, procedures, corporate knowledge base are examples
22. Approved version of the schedule
25. Keeping errors out of the process
27. A technique used to verify enough time and money is set aside for
contingencies
DOWN
1. Allows acceleration of a schedule activity
2. The two methods are crashing and fast tracking
3. _________ deliverables are correct per Control Quality
4. Produce repetitive products, services or results
6. Includes prevention costs and appraisal costs
12. A speech is an example of this communication type
13. A risk strategy which reduces the probability of a risk occurring
15. Stakeholder influence and risk ______ as time passes in the project
life cycle
16. Early finish of predecessor activity + 1 = ___________
17. Technique that determines the Estimate at Completion
19. A negative risk
23. Although lessons learned are documented throughout the project, in
this process group they are formally gathered
24. Costs that include inspections
26. Total planned value of all project work

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 Section Four

Mad Libs Exercises

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 Mad Libs Exercise 1 (Initiating & Planning)

1. Project Charter 30. Communications Management Plan

2. Acquire Resources 31. Communications Requirements Analysis
3. Identify Stakeholders 32. Project Manager
4. Stakeholder Register 33. Risk Management Plan
5. Stakeholder Engagement Plan 34. uncertain
6. Collect Requirements 35. Identify Risks
7. Project Scope Statement 36. Risk Register
8. Scope Baseline 37. Perform Qualitative Risk Analysis
9. Work Breakdown Structure 38. Probability and Impact
10. WBS Dictionary 39. Watch List
11. Work Breakdown Structure 40. Perform Quantitative Risk Analysis
12. Activity List 41. Expected Monetary Value
13. Sequence Activities 42. Risk Register
14. Schedule Network Diagram 43. Plan Risk Response
15. Estimate Activity Resources 44. Plan Procurements
16. Activity Resource Requirements 45. Project Management Plan
17. Estimate Activity Durations 46. Procurements Management Plan
18. Schedule Baseline 47. Make-or-Buy Decisions
19. Cost Management Plan
20. Estimate Costs
21. Determine Budget
22. Cost Baseline
23. Project Budget
24. Cost Baseline
25. Quality Management Plan
26. Quality Metrics
27. Roles and Responsibilities
28. RACI Chart
29. Accountable

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 Mad Libs Exercise 2 (Executing)

1. Direct and Manage Project Work

2. Project Management Information System
3. Preventive Actions
4. Corrective Actions
5. Work Performance Data
6. Manage Quality
7. Acquire Resources
8. Project Team Assignments
9. Develop Team
10. Team Performance Assessment
11. Team Charter
12. Plan Resource Management
13. Manage Team
14. Manage Communications
15. Project Communications
16. Project Management Plan
17. Project Documents
18. Conduct Procurements
19. Selected Sellers
20. Agreements
21. Resource Calendars
22. Stakeholder Register
23. Manage Stakeholder Engagement
24. Issue Log
25. Project Manager
26. Project Sponsor

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 Mad Libs Exercise 3 (Monitoring & Controlling)

1. Monitor and Control Project Work 31. Control Costs

2. throughout the project 32. Earned Value Management
3. Change Requests 33. Cost Performance Index
4. Work Performance Reports 34. Cost Forecasts
5. Monitor Stakeholder Engagement 35. Estimate at Completion
6. throughout the project 36. Variance at Completion
7. Manage Stakeholder Engagement 37. over
8. Work Performance Information 38. Monitor Communications Process
9. approved 39. at all stages
10. Scope Creep 40. Communications Management Plan
11. Perform Integrated Change Control 41. Manage Communications
12. Change Log 42. Issue Log
13. Approved 43. Change Requests
14. Project Management Plan 44. Manage Quality
15. Project Documents 45. Control Quality
16. Control Procurements 46. Quality Metrics
17. Procurement Performance Reviews 47. Approved Change Requests Review
18. Control Scope 48. Approved Change Requests
19. Perform Integrated Change Control 49. Quality Control Measurements
20. Variance Analysis 50. Manage Quality
21. Monitor Risks 51. Organizational Process Assets Updates
22. throughout the project
23. Risk Audits
24. Reserve Analysis
25. Change Requests
26. Control Schedule
27. Schedule Compression Techniques
28. Fast-tracking
29. Crashing
30. Schedule Forecast

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 Mad Libs Exercise 4 (Closing)

1. accepted
2. Lessons Learned Documents
3. Resource Management Plan

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 Section Five

Earned Value Exercises

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 Earned Value Exercise 1

1. EV: CPI = EV
AC
Therefore: EV = CPI x AC
EV = 0.96 x $30,000
EV = $28,800

Because we know CPI and AC from the facts of the question, we use the CPI formula and simply solve for the
missing value (EV) by multiplying the CPI by AC. This should be your first step, because knowing EV will be
critical to answering the remaining questions.

2. PV: SPI = EV
PV
Therefore: PV = EV
SPI
PV = $28,800
1.2
PV = $24,000

Now that we have the value for EV, we can plug in the other known values to the SPI formula to solve for PV.
Here, we are given the SPI in the question and we now know EV, so we simply plug those in and solve for the
missing PV value by dividing EV ($28,000) by our SPI (1.2).

3. BAC: BAC = PV x 4
BAC = $24,000 x 4
BAC = $96,000

Here we have to determine BAC, which is our original total budget. The first step is to know where we are in time,
and the facts tell us we are ¼ of the way done. It may be tempting to just take AC and multiply it by 4 to get the
total BAC, but don’t take the bait. Remember, AC is what we actually spent, not necessarily what we planned to
spend. We need to know what we planned to spend in total, so we look to the current PV because there are no
other clues given. Because we know the work is evenly spread across the 12 weeks, we know that our produc-
tion rate should be linear, and therefore the PV for the next 3 periods should each match that of the current
period. Thus, we multiply our PV at the ¼ mark by 4 and get our BAC of $96,000. This will tell us the total value
of work we planned to achieve, using the spend rate we built into our budget.

4. EAC: EAC = BAC

CPI
EAC = 96,000
0.96
EAC = $100,000

Things get a lot easier now, since we have the key values we need (EV, PV, BAC and AC) to perform any earned
value equation. Because spending is expected to continue at the current rate (meaning variances are typical),
we use the BAC/CPI formula to get our Estimate at Completion forecast (which is what we now believe we will
spend in total to complete the project).

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 Earned
Earned
Value
Value
Exercise
Exercise
1 Cont.
2

5. ETC: ETC = EAC - AC

ETC = 100,000 - $30,000
ETC = $70,000

ETC tells us what we will spend from this point forward, to complete the project. The ETC formula is always the
same (EAC-AC) regardless of the circumstances (we already accounted for those circumstances when we
calculated EAC). Thus, we subtract our Actual Costs of $30,000 from our Estimate at Completion of $100,000,
and we know we will need to spend another $70,000 to complete the project (assuming spending continues at
the current rate).

6. VAC: VAC = BAC - EAC

VAC = 96,000 - 100,000
VAC = -$4,000

Another easy one. VAC (Variance at Completion) just tells us the difference between our EAC (updated total
budget forecast now that we are doing the work) and our BAC (original budget we established during planning).
This formula is always the same regardless of the circumstances (we already accounted for those circumstances
when we calculated EAC). The VAC of -$4,000 tells us we expect to spend $4,000 over our original budget to
complete the project.

7. TCPI: TCPI = BAC - EV

BAC - AC
TCPI = 96,000 - 28,800
96,000 - 30,000
TCPI = 67,200
66,000
TCPI = 1.018 (round this to 1.02)

TCPI, or “To Complete Performance Index,” tells us how efficient we must be with costs moving forward in
order to finish within our original budget (BAC). This tells us that we need to get $1.02 in value from every $1
spent for the remaining 9 weeks of the project to make up for our current shortfall in cost efficiency and deliver
the project on budget.

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 Earned Value Exercise 2
3

1. EV: CPI = EV
AC
Therefore: EV = CPI x AC
EV = 0.96 x $125,000
EV = $120,000 (i.e. this is the amount of work you have completed)

2. PV: SPI = EV
PV
Therefore: PV = EV
SPI
PV = $120,000
0.89
PV = $134,831.46 (i.e. this is the amount of work you SHOULD have completed up until now)

3. BAC: We are 1/3 of the way through the project. Our PV is $134,831.46, so our Budget at completion is:
BAC = PV x 3
BAC = $134,831.46 x 3
BAC = $404,494.38 (i.e. the original baseline budget)

4. EAC: Since the question states budgeted rate is going to be used we need to use the following formula:
EAC = AC + (BAC - EV)
EAC = $125,000 + ($404,494.38 - $120,000)
EAC = $409,494.38 (i.e. the new estimated budget)

5. ETC: ETC = EAC - AC

ETC = $409,494.38 - $125,000
ETC = $284,494.38 (i.e. how much funding is needed to complete the project)

6. VAC: VAC = BAC - EAC

VAC = $404,494.38 - $409,494.38
VAC = -$5,000 (i.e. we are heading towards being $5,000 over budget).

7. TCPI: Since the original budget may still be achievable we will use the following formula:
TCPI = (BAC - EV)
(BAC - AC)
TCPI = ($404,494.38 - $120,000)
($404,494.38 - $125,000)
TCPI = $284,494.38
$279,494.38
TCPI = 1.01 (or 101%) (i.e. ‘if we work at 101% efficiency rate between now and the end of the
project we will meet our original budget’)

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 Earned Value Exercise 4
3

1. PV: PV = 50% x $100,000

PV = $50,000
This is the amount of work that should have been completed to date. You are 5 weeks into a 10-week project so
you should have completed 50% of the work so far.
(You could also take 5 x $10,000 = $50,000, because a 10-week project costing $100,000 with an equal spend
rate throughout means you should be spending at a rate of $10,000 per week – the budgeted rate)

2. EV: EV = BAC x % Complete

EV = 40% x $100,000
EV = $40,000
This is the amount of work that has actually been completed. The question states you have done 40% of the work
so far.

3. AC = $60,000
Provided in the facts of the question

4. BAC = $100,000
Provided in the facts of the question

5. CV: CV = EV - AC
CV = 40,000 - 60,000
CV = -$20,000
This tells us that we are currently $20,000 over budget, since we have spent $60,000 but only obtained $40,000
of work value.

6. SV: SV = EV - PV
SV = 40,000 - 50,000
SV = -$10,000
This is how far behind schedule we are right now, i.e. we should have completed $10,000 worth of work at this
point. It may seem odd that we gauge our schedule performance in dollars, but keep in mind we had to assign
a dollar value for all of this work during planning (which was based on what we planned to spend to get the work
done).

7. CPI: CPI = EV
AC
CPI = 40,000
60,000
CPI = 0.667
For every dollar we are spending we are only getting 66.7 cents worth of work done (relative to the budgeted
spend rate).

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 Earned Value
Earned Exercise
Value 3 Cont.
Exercise 5

8. SPI: SPI = EV
PV
SPI = 40,000
50,000
SPI = 0.8
We have only completed 80% of the work that we should have completed at this point in time.

9. EAC: EAC = BAC

CPI
EAC = 100,000
0.667
EAC = $149,925
This is our budget forecast. The facts tell us we expect to continue working at the same inefficient rate and so
our “new” forecast for total expenditures (EAC) is telling us that the project will end up costing $149,925 in total.

10. ETC: ETC = EAC - AC

ETC = 149,925 - 60,000
ETC = $89,925
This is how much more we will spend from today through the end of the project in order to complete the work.

11. VAC: VAC = BAC - EAC

VAC = 100,000 - 149,925
VAC = -$49,925
We expect to have actually spent $49,925 more than our original budget when the project is over, assuming the
current spending rate continues.

12. TCPI: TCPI = (BAC - EV)

(BAC - AC)
TCPI = (100,000 - 40,000)
(100,000 - 60,000)
TCPI = 1.5 (or 150%)
Between now and the end of the project we would need to achieve a cost efficiency of 150% in order to meet the
original budget expectations. In other words, we need to get $1.50 worth of value out of every $1 spent going
forward to deliver the project for the original budgeted amount ($100,000).

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 Earned Value Exercise 4
6

The Problem: You don’t have all the values you need to perform your calculations

The Solution: You must solve for the missing values using the information you are given.

Steps to follow:

1) Determine what information you need to provide. In this case, they are looking for AC.

2) Determine what values are given in the facts. Here, we are given CPI and SPI directly, and are given PV
indirectly (we should have completed $1 million worth of work at this point). So we know CPI, SPI and PV, and
can work backwards from there.
CPI = 0.8
SPI = 1.2
PV = 1,000,000

3) Next we take the values we have and look to our formula sheet to see which of them utilizes the figure that
we need to solve for (AC). We find that CPI utilizes AC, since that formula is:

CPI = EV
AC.

4) The next step is to determine EV so we can solve for the AC component of the CPI formula. Since we are
given PV ($1 million) and SPI (1.2) we can solve for EV. We know that SPI = EV/PV. Hence, we use the
formula:

SPI = EV
PV
EV = SPI x PV
EV = 1.2 x 1,000,000
EV = 1,200,000

We have now solved for EV, and are almost done.

5) Now that we have CPI and EV, we can back into the AC value we are looking for.

CPI = EV
AC
AC = EV
CPI
AC = 1,200,000
0.8
AC = 1,500,000

Your AC is $1.5 million.

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 Earned Value
Earned Exercise
Value 6 Cont.
Exercise 5

You are managing a project to install flooring for a 10-room building. Each room will take 1 week to complete and
will cost $1,000. You are 4 weeks into the project and have completed 4.5 rooms to date at a cost of $4,200.
Assume spending will continue at current rate.

Calculation Answer Explanation

PV 4 wks x $1,000 $4,000 How much work should have been

completed at this point in time

EV 4.5 rooms X $1,000 $4,500 How much work has actually been
completed so far

AC - $4,200 Given in the question

BAC 10 wks x $1,000 $10,000 Total estimated cost of the entire

project (baseline budget)

CV EV - AC $300 Under Budget

= 4500 - 4200

SV EV - PV $500 Ahead of Schedule

= 4500 - 4000

CPI EV / AC 1.071 For every $ spent you have done

= 4500 / 4200 $1.07 worth of work

SPI EV / PV 1.125 You have worked at a rate of 112.5% so far

= 4500 / 4000 (i.e. completed 12.5% more work than planned)

EAC BAC / CPI $9,337.06 At this rate we should finish our project at
= 10000 / 1.07 a cost of $9,337.06, instead of $10,000

ETC EAC-AC $5,137.06 Need funding of $5,137.06 to

= 9337.06 - 4200 complete the project

VAC BAC - EAC $662.94 We should be $662.94 under budget

= $10000 - 9337.06

TCPI (BAC-EV) / (BAC-AC) 0.948 We only need to work at an efficiency

=(10k-4.5k) / (10k-4.2k) rate of 94.8% to meet the original budget

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 Earned Value Exercise 6

1. What is the Planned Value of Activity D as of the end of Monday in week 4?

Answer: $1,200

We get the planned value by determining where we are in time, and calculating what amount of the work should
have been done by this point, according to our plan. In this case, we know that each activity was scheduled to
take one week, with equal amounts of work being performed each day. Since we know our BAC for Activity D is
$6,000, we simply divide that by 5 to get $1,200. After one day we should have completed $1,200 worth of work,
and $1,200 worth of additional work the next day (for a total PV of $2,400 at that point), and so forth.

2. What is the Earned Value of Activity D at the end of week 4?

Answer: $3,000

In this case we need to calculate the value of what we have created at this point. Note that the value is based
on what we planned to spend to perform the work. In other words, think of EV as what a piece of work is worth
to us based on how much we planned to spend to accomplish it (as opposed to what we could sell it for). We
therefore have a piece of work valued at $6,000 total to us (BAC), and we are 50% done with that work. We
therefore multiply $6,000 by .5 and get $3,000.

3. What is the TCPI of Activity D at the end of week 4?

Answer: .9375

TCPI shows us the efficiency rate at which we must work going forward to finish on budget. The formula is (BAC
– EV) / (BAC-AC). We know the BAC for this activity is $6,000. And since it is 50% complete at the time
referenced in the question, we know our EV is $3,000 (50% of $6,000). Finally, we know we have spent $2,800
to get where we are, so we have our AC. Plugging in the numbers, we get (6,000 – 3,000) / (6,000 – 2,800), or
3,000/3,200. When we do the math, we get .9375.

4. What is the Cost Variance for Activity B at the end of week 3?

Answer: ($500)

Cost Variance tells us the difference between the budgeted value of the work we completed (EV) and the
amounts we had to spend to get that work done (AC). The formula is EV-AC. In this case, the EV is $8,000 since
that is the amount we budgeted for that work to be completed. However, we actually spent $8,500 to get the work
done (AC). Thus, $8,000 - $8,500 results in a Cost Variance of ($500). Note that negative values will usually be
shown in parentheses. Negative costs variances tell us we are over budget. Positive Cost Variances tell us we
are under budget. A Cost Variance of 0 means we spent exactly what we planned to spend for that activity.

Note that we would calculate Cost Performance Index using the same values, but we would divide instead of
subtracting. Hence, $8,000 / $8,500 = CPI of .941. This tells us that, for every dollar we are spending on this
activity, we are only getting 94 cents of value. CPI is generally considered the most important Earned
Value metric.

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 Earned Value Exercise 6 Cont.

5. What is the Schedule Variance for Activity A at the end of week 1?

Answer: ($1,000)

Schedule Variance tells us the difference between what we have completed at a particular point in time and what
we should have completed at that point. The formula is EV – PV. Here, we only completed 80% of the work for
Activity A after one full week, and we know Activity A was planned to be complete after one full week. Thus, our
earned value is 80% of the original budget for the activity (.8 x $5,000 = EV of $4,000). But we were supposed
to have completed all the work at this point, which was budgeted for $5,000. Thus, we subtract $5,000 from
$4,000 to get a Schedule Variance of ($1,000).

Note that Schedule Performance Index uses the same values, but you simply divide instead of subtracting.
Thus, our SPI at this point in time would be .8 ($4,000 / $5,000). We should have completed 20% more work at
this point in time than we actually did.

6. Which of the following is true regarding Activity D at the end of Week 4?

A. It is over budget and behind schedule
B. It is behind schedule and under budget
C. It is exactly on budget but behind schedule
D. There is not enough information provided to answer

Answer: B.

This activity is behind schedule and under budget. We are looking at the status at the end of week 4. At that
time, the activity should have been completed, but was only 50% done, so we are behind schedule. But we have
managed to stay slightly under budget, however, since we have completed half the work (which was originally
budgeted at $6,000) while only spending $2,800. Our Cost Variance therefore is $200 (EV of $3,000 – AC of
$2,800) and our CPI is 1.07 (EV of $3,000 / AC of $2,800).

7. Assuming variances encountered to date will not continue, what is the EAC of the entire project (all 4 activities
combined) at the end of week 4?

Answer: $31,300

Because variances are atypical, we use the following formula: AC + (BAC - EV). Because we are looking at the
entire project, we need to aggregate the figures from each activity, which yields the following totals: AC -
$28,300; EV - $26,000; BAC - $29,000. We therefore calculate 28,300 + (29,000 – 26,000) to get $31,300. Our
Variance at Completion (VAC), would therefore be ($2,300), since VAC = BAC – EAC.

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 Section Six

Critical Path Exercises

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 Critical Path Exercise 1

1. Draw a network diagram based on the data listed in the table below.

TASK PREDECESSOR DURATION B C

6 6
A none 13 weeks
B A 6 weeks A F
13 9
C B 6 weeks
D A 8 weeks D E
8 10
E B, D 10 weeks
F C, E 9 weeks

2. The paths based on the network diagram:

ABCF, ABEF, ADEF

3. The duration of each path based on the network diagram:

ABCF=34 weeks (13+6+6+9)
ABEF=38 weeks (13+6+10+9)
ADEF=40 weeks (13+8+10+9)

4. The critical path based on the network diagram:

ADEF, with a duration of 40 weeks (13+8+10+9)

5. The early start, early finish, late start, late finish and float for each activity based on the network diagram:
Float = 2 Float = 6
14 19 20 25
ES B EF ES C EF
Float = 0 Float = 0
1 13
LS 6 LF LS 6 LF
32 40
16 21 26 31
ES A EF ES F EF
LS 13 LF
14 21 22 31
LS 9 LF
1 13 32 40
ES D EF ES E EF
LS 8 LF LS 10 LF
14 21 22 31
Float = 0 Float = 0

6. The path with the least schedule risk based on the network diagram:
ABCF, with a duration of 34 weeks (13+6+6+9)

7. If the duration for activity B changes to 9 weeks, the impact to the project is that there is a new critical path:
ABCF=37 (13+9+6+9)
ABEF=41 (13+9+10+9) – New Critical Path
ADEF=40 (13+8+10+9)

8. All options to reduce the schedule must be analyzed with respect to overall project impacts, and those
options include:
• “Crashing,” which involves adding resources to a project activity to make it finish sooner. Here, either
internal or external resources can be added to Activity E on the critical path. Crashing almost always
increases costs, however. The activity on the critical path with the lowest crashing cost should be
considered first.

• Utilizing the same resource on a critical path activity but having that person work overtime.
This could be considered a form of crashing because you are using more resource hours and costs
will rise.

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 Critical Path Exercise 1 Cont.

8. Cont.
• Adding a more skilled resource (if possible) on a critical path activity to reduce time. This is also
a form of crashing in that you are adding greater resources in an effort to finish sooner.

• “Fast tracking,” which involves changing the sequence of activities so that some activities run in
parallel, instead of sequentially. Fast tracking assumes that the dependencies between the activities
are discretionary. Fast tracking almost always increases the risk of rework.

• Lowering the quality standards, but only if approved by the stakeholders.

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 Critical Path Exercise 2

A project has six activities: A, B, C, D, E and F. Activity A can start anytime and takes 13 weeks to finish. Activity
A must be completed before Activities B and D can start. Activity B requires 6 weeks to complete and Activity D
requires 8 weeks to complete. Activity B must be completed before Activity C can start. Activity C requires 12
weeks to complete. Activities B and D must be completed before Activity E can start and Activity E requires 10
weeks. Activity F takes 9 weeks and can start as soon as Activities C and E are completed.

1. Draw the network diagram based on the scenario above.

B C
6 12

A F
13 9

D E
8 10
2. The paths based on the network diagram:
ABCF, ABEF, ADEF

3. The duration of each path based on the network diagram:

ABCF = 40 weeks (13+6+12+9)
ABEF = 38 weeks (13+6+10+9)
ADEF = 40 weeks (13+8+10+9)

4. There are two critical paths based on the network diagram. Having multiple critical paths increases the
project risks:
ABCF = 40 weeks (13+6+12+9)
ADEF = 40 weeks (13+8+10+9)

5. The early start, early finish, late start, late finish and float for each activity based on the network diagram:
Float = 0 Float = 0
14 19 20 31
ES B EF ES C EF
Float = 0 Float = 0
1 13
LS 6 LF LS 12 LF
32 40
14 19 20 31
ES A EF ES F EF
LS 13 LF
14 21 22 31
LS 9 LF
1 13 32 40
ES D EF ES E EF
LS 8 LF LS 10 LF
14 21 22 31
Float = 0 Float = 0
6. If the relationship for activity C changed to Start-to-Start (S-S) with activity B, path ABCF is no longer a critical
path. Path ACF will complete in 34 weeks. Because activities B and C start at the same time, only the one
with the longer duration (C) needs to be included in the critical path analysis. The critical path is ADEF, with
a duration of 40 weeks: Float = 6
14 25
ES C EF
LS 12 LF
20 31
14 19
ES B EF Float = 2
Float = 0 Float = 0
1 13 LS 6 LF 32 40
ES EF 16 21 ES EF
A F
14 21 22 31
LS 13 LF LS 9 LF
ES D EF ES E EF
1 13 32 40
LS 8 LF LS 10 LF
14 21 22 31
Float = 0 Float = 0

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 Critical Path Exercise 3

1. The paths based on the network diagram are:

ACFI
ADGI
BDGI
BEHI

2. The duration of each path based on the network diagram:

ACFI = 2430 (10+8+6+6)
ADGI = 2418 (10+4+4+6)
BDGI = 2620 (12+4+4+6)
BEHI = 2834 (12+8+8+6)

3. The critical path based on the network diagram is path BEHI, with a total duration of 28
34 (12+8+8+6)

4. The path with the least schedule risk based on the network diagram is ADGI = 24 (10+4+4+6).

5. The early start, early finish, late start, late finish and float for each activity based on the network diagram:
11 18 19 24
ES C EF Float = 4 ES F EF Float = 4
Float = 4
1 10 LS 8 LF LS 6 LF

ES A EF 15 22 23 28

LS 10 LF 13 16 17 20 29 34
5 14 ES EF Float = 8 ES EF Float = 8 ES EF
D G I
LS 4 LF LS 4 LF LS 6 LF
1 12
21 24 25 28 29 34
ES B EF 13 20 21 28
Float = 0
LS 12 LF ES E EF ES H EF
1 12 LS 8 LF LS 8 LF
Float = 0
13 20 21 28
Float = 0 Float = 0

6. If the duration for activity H changes to 6 and the relationship for activity H changes to Finish-to-Finish (F-F)
with activity E, the start dates for Activity H are calculated based on activity H and E finishing at the same time.
In other words, you start by taking the EF and LF of Activity E and plugging them in for the EF and LF of Activity
H as well (since it is a F-F relationship). You then subtract the duration of 6 and add one back in to get the ES
and LS for Activity H. The path BEI has a duration of 24 26 weeks. Activity H does not have to be added to the
calculation, since it is ongoing at the same time as Activity E, and takes less time in duration. The new critical
path is ACFI, with a duration of 30 weeks and has the least amount of float.

11 18 19 24
ES C EF Float = 0 ES F EF Float = 0
Float = 0
1 10 LS 8 LF LS 6 LF

ES A EF 11 18 19 24

LS 10 LF 13 16 17 20 25 30
1 10 ES EF Float = 4 ES EF Float = 4 ES EF
D G I
LS 4 LF LS 4 LF LS 6 LF
1 12
17 20 21 24 25 30
ES B EF 13 20
Float = 0
LS 12 LF ES E EF Float = 4
5 16 LS 8 LF
Float = 4
17 24
15 20
ES H EF
LS 6 LF
Float = 4
19 24

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