Describe the linkages of the work breakdown structure and the time-phased budget to arrive at an earned value analysis. What is the impact on earned value if the cost estimation is significantly lower because of low estimates or specification changes in the project? Provide examples of projects you have been involved with or read about that may have had this problem. Respond to at least two of your classmates’ postings.
There are two main components in calculating an earned value analysis, those components are a work breakdown structure, as well as a time-phased budget for each work package. (Venkataraman & Pinto,2008, pp. 114). It’s essential to have both of these present and have accurate information to have an accurate baseline and earned value analyst. The work breakdown structure provides information on which tasks needs to be completed and based on those tasks it can be determined what resources need to be allocated to each task. With the work breakdown structure provided, a time-phased budget can be implemented which will track the timing of budget expenditures that is required to complete each task broken down in the work breakdown. (Venkataraman & Pinto, 2008, pp. 114). Additionally, the time-phased budget has value as it will pinpoint certain areas of the projects, and certain tasks where the most budget is being used up.
Having lower cost estimation can lead to big issues, and just like anything when numbers aren’t accurate in any formula, equation, or estimate, it can throw off all the results significantly. There are several ways a project could be impacted in this situation, one of which is the project could appear to be constantly over budget, providing a bad and possibly inaccurate outlook. If the cost estimation isn’t calculated correctly, and at supplies are needed at one portion of the project, but there isn’t a budget at that time, it can actually delay progress throwing off the timeline. In the prior week I discussed a situation my previous employer was in where our recently replaced equipment was having technical difficulties, this caused more money to the company as a result. This situation, if not rectified quickly (as it was), would have reflected negatively on the project and our projected budget causing a situation similar to the one in this discussion.
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