Franklin Electronics

Name

Institution

1. CASE-STUDY QUESTIONS

Question one: Are the vice president’s comments about cost and schedule variance correct?

The vice president’s comments about cost and schedule variance are correct. However, the computation approach used was incorrect.

Question two: What information did the vice president fail to analyze?

The vice president of Spokane Industries used a wrong approach to compute the overruns, and subsequently compared the monthly percentages directly. To illustrate, Spokane Industries’ manager computed the cost variance overrun and the schedule variance slippage as follows;

Cost variance overrun=

Cost variance overrun=

Schedule variance slippage =

Schedule variance slippage = =45%

However, the right approaches for calculating the cost variance index and schedule variance index should have been as follows;

Cost variance index

Cost variance index (month 2) = – 0.1556

Cost variance index (month 3) =-0.0984

Compare CVI (months 2 and 3) = -0.0984-(-0.1556) =0.0572

Schedule variance index=

Schedule variance index (month 2) =

Schedule variance index (3^rd month) = =-0.256

Schedule variance index (3^rd month) = =-0.151

Compare SVI (months 2 and 3) =-0.151-(-0.256) =0.105

Question three: What additional information should have been included in the status report?

The status report should have included information such as the cause and effects of problems that led to schedule delays, and the most suitable solutions to the problems. In addition, the status report should have included the project’s budget at completion (BAC), Critical Path and budget estimate at completion.

Question four: Does Franklin Electronics understand earned value measurement? If not, then what went wrong?

Franklin Electronics does not have a good understanding of earned value measurements. This is because the company failed to include three key components. First, the company should have included a project plan showing how the project is evaluated and managed, and that is updated throughout the project cycle. Second, the company should have included recourses needed in terms of capital and human resources. This would have enabled the company show how it would counter overruns in the subsequent phases. Thirdly, the company should have included a report on the currently completed work and PERT network diagram. This would enable Spokane Industries’ manager to comprehend the project’s progress.

Question five. Does Spokane Industries understand project management?

Spokane industries do not understand project management. This is because the company placed significant emphasis on costs and it tended to undermine the importance of communication in a project process. Moreover, the company’s reaction to franklin electronics’ report indicates that the company is poorly versed with project management tools and phases. To illustrate, Spokane industries should have used the EVMS report to understand the project and initiate a discussion on factors affecting the project, and subsequently develop suitable mitigation plans for the challenges.
Question six: Does proper earned value measurement (EVM) serve as a replacement for interchange meetings?

To determine whether earned value measurement can serve as a replacement for interchange meetings, analyses of the EVM in terms of the two companies, and with respect to the advantages of EVM over interchange meetings.

Generally, EVM’s benefits over meetings include it saves time, it avails relatively detailed information about a project and information is availed through earned value status reports. Nonetheless, to Franklin electronics company EVM was a new concept that faced resistance from its cost accounting group and the perception that EVM would mean lack of communication. To the centrally, Spokane industries had incredible faith in EVM’s ability to the extent of assigning a consultant to franklin and planning to incorporate EVM to all its future contracts.

Further, project management involves cost planning and control systems that have some vital aspects. More elaborately, cost estimations have numerous pitfalls due to internal and external factors, project management requires periodic time and cost re-estimation, and project management requires the comparison of actual and budgeted expenditures and evaluation of schedules with a project’s actual progress.

As such, earned value measurement (EVM) cannot serve as a replacement for interchange meetings since Franklin electronics needs to discuss with Spokane industries on how to counter the overruns. In addition, interchange meetings are required to facilitate re-planning, re-estimation and comparison of actual and planned aspects of the project.

Question seven: What should the project manager from Franklin say in his defense?

In his defense, the project manager from Franklin electronics should highlight several issues. First, the project manager should highlight the error in computations by vice Spokane Industries. More precisely, the project cost variance and schedule variance did not increase by 78.6% and 45%, but rather, they increased by 5.72% and 10.5%, respectively. Moreover, the manager should present elaborate plans to control time and costs, thus eliminating schedule and cost overruns.

• PROJECT PROPOSAL FOR FRANKLIN ELECTRONICS

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