Project managers must not only calculate variances but also determine the root cause of the variance. Some variances may be allowable while others must be explained together with a corrective plan for recovery
In the table below, you must demonstrate your ability to calculate the cost and schedule variances as well as determine the root cause of the variances, if possible. Consider the following table, which shows a partial status report for a project composed of five work packages (i.e., activities):
a. Calculate the cost and schedule variances, in dollars, for each activity.
b. For each activity, which of the following could be the root cause reason for the variances? Select as many as you think may apply.
? Accelerated schedule due to higher salaried personnel
? Accelerated schedule due to overlapping of activities
? Accelerated schedule due to overtime
? Accelerated schedule due to additional resources
? Slippage due to lack of resources
? Slippage due to people working on other projects
? Slippage due to mistakes
? People are working but progress is poor
? On schedule
? On budget
? Over budget
c. Management wants to know the status of the total project at level 1 of the WBS. Add up all of the activity cost and schedule variances to determine the level 1 cost and schedule variances. What are your conclusions?
d. Would your conclusions from part c above change if activities B and D were the only two activities on the critical path?