Calculate the composite index for the following portfolio having CPI weight = 80% and SPI weight = 20% Larger image

Question

Options

• A0.9
• B1.5
• C1
• D1.1

• A
  13% (5)
• B
  3% (1)
• C
  76% (29)
• D
  8% (3)

Explanation

The Composite Index is calculated as a weighted average of the Cost Performance Index (CPI) and Schedule Performance Index (SPI) using their respective weights: Composite Index = (CPI × CPI weight) + (SPI × SPI weight). With CPI weight = 80% (0.80) and SPI weight = 20% (0.20), the formula becomes: Composite Index = (CPI × 0.80) + (SPI × 0.20). Based on the data in the referenced table (not visible here), the calculated result equals 1.0 (Option C). A composite index of 1.0 indicates that the portfolio is performing exactly on budget and on schedule in aggregate. Values above 1.0 indicate better-than-planned performance, while values below 1.0 indicate under-performance. This weighted composite gives more emphasis to cost performance (CPI) than schedule performance (SPI).

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