PGMP · Question #311
You are the program manager for your organization. Your program has a budget of $750,000 and is expected to last one year. The program is currently 30 percent complete and has spent $245,000. The prog
The correct answer is C. .91. The Cost Performance Index (CPI) measures cost efficiency in earned value management by dividing Earned Value by Actual Cost.
Question
You are the program manager for your organization. Your program has a budget of $750,000 and is expected to last one year. The program is currently 30 percent complete and has spent $245,000. The program is supposed to be 40 percent at this time. What is the cost performance index for this program?
Options
- A.83
- B-$20,000
- C.91
- DNegative ten percent
How the community answered
(27 responses)- A4% (1)
- B7% (2)
- C78% (21)
- D11% (3)
Why each option
The Cost Performance Index (CPI) measures cost efficiency in earned value management by dividing Earned Value by Actual Cost.
0.83 does not result from any standard earned value formula applied to the data provided.
-$20,000 is the Cost Variance (CV = EV - AC = $225,000 - $245,000 = -$20,000), a different earned value metric, not the CPI.
CPI = EV / AC, where EV = 30% x $750,000 = $225,000 and AC = $245,000, giving $225,000 / $245,000 = 0.9183, which approximates to 0.91. A CPI below 1.0 confirms the program is over budget, receiving about 91 cents of value for every dollar spent.
Negative ten percent is not the format for CPI; the schedule variance percentage in this scenario is -25%, not -10%.
Concept tested: Earned Value Management - Cost Performance Index calculation
Source: https://www.pmi.org/learning/library/earned-value-management-overview-8026
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