# Question 5 The team at SA gold mine was tasked to sink a 2000

Question: Question 5 The team at SA gold mine was tasked to sink a 2000 m deep ventilation shaft, and then to excavate room for a station at the bottom of the shaft. The approved plan was to sink the shaft within 20 months at a cost of R68000 (approximately US\$10000) per meter of shaft depth. For the station at the bottom 30000 cubic meter of rock would have to be

Show transcribed image text 100% (1 rating)Transcribed image text: Question 5 The team at SA gold mine was tasked to sink a 2000 m deep ventilation shaft, and then to excavate room for a station at the bottom of the shaft. The approved plan was to sink the shaft within 20 months at a cost of R68000 (approximately US\$10000) per meter of shaft depth. For the station at the bottom 30000 cubic meter of rock would have to be excavated within 3 months at a cost of R750 per cubic meter. The plan assumed a straight line earned value over time. After the work had begun, the scope of the project was changed to include excavation for a new station halfway down the shaft with a volume of 20000 cubic meters. It was agreed that the additional work had to be done at the same excavation rate as the bottom station, but since removal of the rock required hoisting of only 1000 meters instead of 2000 meters for the bottom station, the team agreed to the cost of R550 per cubic meter (compared to the R700 budgeted for the bottom station). Since working space and other resources available would limit the amount of work that would be done simultaneously, everyone agreed that the new station would delay the sinking of the shaft. After 13 months, the shaft had reach depth of 1350 meter below surface and excavation for the halfway station was completed. The actual cost at this time was R90-million, which was more than what was budgeted. The executive management requested an earned value report. Information on the relative amounts of time spent on excavating the new station and sinking the shaft was not available. Calculate and interpret the: Cost Variance, Schedule Variance, Total Variance, Cost Performance Index and Schedule Performance Index. Indicate the Earned Value after 13 months