Oliver Martinez M5: Case Study Assignment
1. Calculate the schedule variance and cost variance for the Bullwhip project?
For the Bullwhip project, the schedule and cost variances total -$320,000. 2. Does Jimmy's point about the material costs have merit? If so, does this have any implications for the way the earned valued is calculated at Peak?
There is something to Jimmy's argument that material costs can significantly impact project costs early in a project's life cycle. This indicates that nearly all the funding is being used on supplies up front, which may not be realized as the project progresses. This might affect how earned value is determined at Peak Lighting since typical earned value management methodologies could not effectively reflect the progress, especially in projects where material expenditures represent a substantial amount of the budget. 3. Who is right about the status of the project? Eric or Jimmy?
Regarding the project's current state, Eric is right. The project is running over budget and behind schedule, as seen by the negative schedule and cost variances. 4. What advice, if any, would you offer Eric related to his new role of VP of
Operations?
Eric needs to mentor Jimmy and the other project managers so they may understand earned value management and other project management ideas and methods.
