You and your team are working on a new project. Your project sponsor, Dr. Sikder Kamr, has asked you to refine the existing cost estimate for the project so you can evaluate supplier bids and have a solid cost baseline for evaluating project performance. Recall that your schedule and cost goals are to complete the project in eight months for under $150,000. You planned to use up to $65,000 total to pay yourself and your team members, and your initial estimates were $35,000 for travel expenses, $25,000 for hardware and software, and $25,000 for organizing four events, including consultants, legal/business fees, etc. Tasks 1. Prepare a one-page cost model for the project, like the model provided in Figure 1. Develop a Work Breakdown Structure (WBS) of the project and be sure to document your assumptions in preparing the cost model. Assume a job rate of $30/hour for the team lead (the project manager) and $25/hour for team members (you could consider arbitrary team members if needed). You will pay John, your IT manager, $40/hour. The project will fund refreshments for the four Shark Tank like events and prizes for the winners, at a cost of $1,500 for each event. [2 marks] Surveyor Pro Project Cost Estimate Created October 5 #Units/Hrs. Cost/Unit/Hr. Subtotals WBS Level 2 Totals % of Total WBS Items 1. Project Management Project manager Project team members Contractors (10% of software development and testing) 2. Hardware 2.1 Handheld devices 2.2 Servers 3. Software 3.1 Licensed software 3.2 Software development* 4. Testing (10% of total hardware and software costs) 5. Training and Support Trainee cost Travel cost Project team members Subtotal $306,300 20% 960 $100 $96,000 1,920 $75 $144,000 $66,300 $76,000 5% 100 4 $600 $60,000 $4,000 $16,000 $614,000 40% 100 $200 $20,000 $594,000 $69,000 $69,000 5% $202,400 13% 100 $500 $50,000 12 $700 $8,400 1,920 $75 $144,000 $1,267,700 $253,540 $253,540 17% $1,521,240 6. Reserves (20% of total estimate) Total project cost estimate *See software development estimate. Figure 1 Example of a proiect cost estimate. 2. Using the cost model you created in Task 1, prepare a cost baseline by allocating the costs by WBS for each month of the project. [1.5 mark] 3. Assume that you have completed four months of the project. The BAC was $150,000 for this eight-month project. You can also make the following assumptions: PV = $75,000 EV = $70,000 AC = $65,000 a. What is the cost variance, schedule variance, cost performance index (CPI), and schedule performance index (SPI) for the project? [2 marks] b. How is the project doing? Is it ahead of schedule or behind schedule? Is it under budget or over budget? [1 mark] c. Use the CPI to calculate the estimate at completion (EAC) for this project. Is the project performing better or worse than planned? [1 mark] d. Use the SPI to estimate how long it will take to finish this project. [1 mark] e. Sketch an earned value chart using the information from your answers to parts a through d. Use Figure 2 as a guide. [1.5 mark] 120,000 100,000 Estimate at completion (EAC) Budget at completion (BAC) Planned value (PV) An EAC point above and to the right of the BAC point means the project is projected to cost more and take longer than planned. 80,000- $ 60,000- Actual cost (AC) 40,000 Earned value (EV) 20,000- 1 2 3 4 5 6 7 8 9 10 11 12 13 Month -Actual cost (AC) Planned value (PV) Earned value (EV) Figure 2 Earned value chart for project after five months.