John works as a project manager for BlueWell Inc. His project has a budget of $795,000 and he has spent $325,000 on the project. But, he has completed only 40 percent of the project work till now…

The correct answer is D. 0.92. Cost performance index (CPI) is used to calculate performance efficiencies. It is used in trend analysis to predict future performance. CPI is the ratio of earned value to actual cost. The CPI is calculated based on the following formula: CPI = Earned Value (EV) / Actual Cost…

Schedule Monitoring and Controlling

Question

John works as a project manager for BlueWell Inc. His project has a budget of $795,000 and he has spent $325,000 on the project. But, he has completed only 40 percent of the project work till now. Management wants to know what the project's cost performance index is. What value will John report?

Options

A0.76
B0.85
C0.80
D0.92

How the community answered

(20 responses)

A
15% (3)
B
5% (1)
C
5% (1)
D
75% (15)

Explanation

Cost performance index (CPI) is used to calculate performance efficiencies. It is used in trend analysis to predict future performance. CPI is the ratio of earned value to actual cost. The CPI is calculated based on the following formula: CPI = Earned Value (EV) / Actual Cost (AC) If the CPI value is greater than 1, it indicates better than expected performance, whereas if the value is less than 1, it shows poor performance. The CPI value of 1 indicates that the project is right on target. In this instance, it's EV = 0.40 * 750,000 = 300,000/325,000

Topics

#CPI#earned value management#cost performance index#performance metrics

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