nerdexam
PMI

PGMP · Question #178

Which earned value management formula can help you determine how likely it is that you'll complete the program based on the amount of cash left in the program budget?

The correct answer is C. To-complete performance index. The To-Complete Performance Index (TCPI) tells you the cost efficiency required on remaining work to finish within the remaining program budget.

Program Life Cycle Management

Question

Which earned value management formula can help you determine how likely it is that you'll complete the program based on the amount of cash left in the program budget?

Options

  • AEstimate at completion
  • BVariance at completion
  • CTo-complete performance index
  • DEstimate to complete

How the community answered

(38 responses)
  • A
    3% (1)
  • B
    3% (1)
  • C
    87% (33)
  • D
    8% (3)

Why each option

The To-Complete Performance Index (TCPI) tells you the cost efficiency required on remaining work to finish within the remaining program budget.

AEstimate at completion

Estimate at Completion (EAC) projects the expected total final cost of the program based on current performance, but does not express the efficiency ratio needed to stay within remaining funds.

BVariance at completion

Variance at Completion (VAC = BAC - EAC) shows the expected budget surplus or deficit at completion, but does not indicate the performance efficiency required on remaining work.

CTo-complete performance indexCorrect

TCPI = (BAC - EV) / (BAC - AC), where BAC is the Budget at Completion. This formula directly answers whether the remaining budget is achievable by showing the performance ratio required on all future work - if TCPI is significantly greater than 1.0, completing on budget is unlikely given current performance trends.

DEstimate to complete

Estimate to Complete (ETC) forecasts the remaining cost to finish the work but does not express it as a performance efficiency ratio relative to remaining budget.

Concept tested: To-Complete Performance Index (TCPI) for budget feasibility

Source: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok

Topics

#Earned Value Management#Cost Management#Program Performance#Financial Analysis

Community Discussion

No community discussion yet for this question.

Full PGMP Practice