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.