You and your spouse have purchased a foreclosure you hope to flip for a profit. The two bathrooms had been recently remodeled by the previous owners. The three bedrooms need only cosmetic work – something you decide to undertake yourself. The majority of your budget will be used for remodeling the kitchen, the dining room, and the family room. Since this is your first flip, you've hired an experienced home inspector to help you scope the project. You want to track costs carefully to stay as close to budget as possible and to give you an accurate baseline for similar work in future flips. Rather than doing a hierarchical decomposition of the project into various products/outcomes and then adding work package descriptors for each lowest-level product/outcome, you chose to list the components that needed work and then describe the work that must be completed for each of these components. NOTE: Assume your descriptions of the work that must be completed for each of the components are work package descriptors and that these work package descriptors are NOT decomposed into lower level elements. Some of the work may have to take a higher priority if cost issues arise during the renovation. The higher priority work includes modifications to the electrical, HVAC, and plumbing systems, removal of two walls to provide an open concept arrangement, and common flooring throughout the kitchen, family room, and dining room areas. The quality of other finishes in the kitchen, dining room, and/or family room may have to be reduced if the cost of the higher priority work becomes an issue. You decide to work backwards from your current list of work (shown below) to develop a WBS. You start by adding an element that represents the entire project and numbering it zero. You also decide to add several control accounts so that you can monitor and manage costs more effectively. These control accounts include: • Higher Priority Work • Lower Priority Work • Utilities and Services (Electrical, HVAC, and Plumbing) • Wall Removals • Kitchen • Dining Room (DR) • Family Room (FR) 1. Without otherwise modifying the WBS structure, add the control accounts listed above. 2. Complete numbering the work breakdown structure so that Microsoft Project will automatically roll up work package costs to these control accounts. NOTE: Your WBS must not violate any WBS core characteristics. WBS No. WBS Element 0 Three-Room Renovation Electrical System Upgrade the electrical service to 200 amps Replace the electrical panel Rerun electrical circuits affected by wall removals Run four new electrical circuits to the kitchen area HVAC Install new furnace and air conditioning units Rerun heating and ventilation ducts affected by wall removals Install ventilation duct for new kitchen range hood Install ventilation duct for new kitchen microwave Plumbing Systems Install larger diameter water pipe from water meter to the house Install tank-less hot water heater Rerun water pipes affected by wall removals Rerun vent pipes affected by wall removals Install water supply pipe for refrigerator ice maker Wall 1 Removal - Between Kitchen and Dining Room Demolish existing wall 1 Install new beam 1 to accept existing structural loads Repair ceiling in way of the new beam 1 Wall 2 Removal - Between Dining Room and Family Room Demolish existing wall 2 Install new beam 2 to accept existing structural loads Repair ceiling in way of the new beam 2 Flooring Install new laminate flooring in the kitchen, dining room, and family room Kitchen Window (Over Sink) Remove existing window over the sink Install new energy efficient window over the sink Replace/repair drywall as necessary around the kitchen window Install kitchen window trim Kitchen Lighting Replace existing can lights Install new pendant lights over the island Kitchen Cabinets, Island, and Countertops Kitchen Cabinets Install upper cabinets Install lower cabinets Install cabinet hardware Kitchen Island Install island Install island hardware Kitchen Countertops Install cabinet countertops Install island countertop Kitchen Painting Repair any remaining drywall defects in the kitchen Paint the kitchen Kitchen Appliances Install range top Install oven Install microwave Install refrigerator Install dishwasher DR Window Remove existing DR window Install new energy efficient DR window Replace/repair drywall as necessary round the DR window Install DR window trim DR Lighting Install new DR chandelier DR Painting Repair any remaining drywall defects in the DR Paint the DR FR Windows Remove three existing FR windows Install three new energy efficient FR windows Replace/repair drywall as necessary around FR windows Install FR window trim FR Sliding Door Remove existing FR sliding door Reframe as necessary for new French door Install new energy efficient French door Replace/repair drywall as necessary around the door Install door trim FR Painting Repair any remaining drywall defects in the FR Paint the FR 3. Calculate the planned budget for each week of the project and for the total project. Week 1 = 5*7 + 10*4 + 15*2 = $ 105 Week 2 = 5*4 + 10*4 + 15*3= $ 105 Week 3 = 5*7 + 10*3 + 15*3=$ 110 Week 4 = 5*4 + 10*4 + 15*4=$ 120 Week 5 = 5*3 + 10*5 + 15*3=$ 110 Planned budget for total project = 105 + 105 + 110 + 120 + 110 = $ 550 4. At the end of week 2, you look at your actual progress and find the following: Calculate Earned Value (EV) for the first two weeks of the project and the project to-date. 5. Is the project ahead of schedule, on schedule, or behind schedule? What EVM information are you using to make this assessment and why? 6. Is the project over budget, under budget, or on budget? What EVM information are you using to make this assessment and why? 7. Assuming you continue working as you are without making any changes to your processes or materials, what is the forecast of total project cost? Will you exceed your total available funds? 8. Assuming you continue working as you are without making any changes to your processes or materials, what is the Variance at Completion (VAC)? 9. At the end of week 3 you discover you that SV is still positive but SPI is 0.95. What does this mean?