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PGMP · Question #58

Your program has a budget at completion of $1,550,000 and is expected to last one year. Currently your program is 45 percent complete and has spent $725,000. According to the program schedule you are

The correct answer is A. The schedule is performing worse because the SPI is .90. Using earned value management (EVM), both schedule performance index (SPI) and cost performance index (CPI) are below 1.0, but comparing them shows the schedule is performing worse. SPI of 0.90 is further from 1.0 than CPI of approximately 0.96.

Program Life Cycle Management

Question

Your program has a budget at completion of $1,550,000 and is expected to last one year. Currently your program is 45 percent complete and has spent $725,000. According to the program schedule you are actually to be fifty percent complete by this time, but due to some vendor delays your program is running just a bit late. Based on this information which is performing worse, the cost or schedule?

Options

  • AThe schedule is performing worse because the SPI is .90
  • BThe cost is performing worse because the EAC is $1,611,111.
  • CThe schedule is performing worse because the SV is -$27,500.
  • DThe cost is performing worse because the CPI is .96.

How the community answered

(27 responses)
  • A
    81% (22)
  • B
    4% (1)
  • C
    4% (1)
  • D
    11% (3)

Why each option

Using earned value management (EVM), both schedule performance index (SPI) and cost performance index (CPI) are below 1.0, but comparing them shows the schedule is performing worse. SPI of 0.90 is further from 1.0 than CPI of approximately 0.96.

AThe schedule is performing worse because the SPI is .90Correct

EV = 45% x $1,550,000 = $697,500; PV = 50% x $1,550,000 = $775,000; AC = $725,000. SPI = EV/PV = $697,500/$775,000 = 0.90, and CPI = EV/AC = $697,500/$725,000 = 0.96. Since SPI (0.90) is further below 1.0 than CPI (0.96), the schedule is performing worse than cost. The schedule is getting only $0.90 of planned value for every dollar of time elapsed.

BThe cost is performing worse because the EAC is $1,611,111.

While the EAC of approximately $1,611,111 is mathematically correct (BAC/CPI), the conclusion that cost is performing worse is incorrect because CPI (0.96) is closer to 1.0 than SPI (0.90), meaning the schedule is actually the bigger problem.

CThe schedule is performing worse because the SV is -$27,500.

The value of -$27,500 is the cost variance (CV = EV - AC = $697,500 - $725,000), not the schedule variance (SV). The actual SV = EV - PV = -$77,500, making this choice factually wrong on the metric label.

DThe cost is performing worse because the CPI is .96.

CPI of 0.96 is correctly calculated, but the conclusion that cost is performing worse is incorrect - the schedule with SPI of 0.90 is performing worse than cost with CPI of 0.96.

Concept tested: Earned value management SPI versus CPI comparison

Source: https://www.pmi.org/learning/library/earned-value-management-best-practices-9426

Topics

#Earned Value Management (EVM)#Schedule Performance Index (SPI)#Cost Performance Index (CPI)#Performance Measurement

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