ITPEC FE Morning April 2023 Question 54

Topic: Project Management

A project was planned to be completed in six months. After six months, the project is behind schedule. The actual cost of Activity A is $100,000. The planned value of Activity A is $80,000. Activity A is only 75% complete. What is the schedule performance index and cost performance index of the project?

OptionSchedule performance indexCost performance index

Explanation

SPI 0.75, CPI 0.6 — earned value divided by planned value gives the schedule index, and divided by actual cost gives the cost index.

Activity A was planned to be finished within the six months, so its planned value now is its whole budget of $80,000.

  • •Earned value: EV = 0.75 × 80,000 = $60,000
  • •SPI = EV ÷ PV = 60,000 ÷ 80,000 = 0.75
  • •CPI = EV ÷ AC = 60,000 ÷ 100,000 = 0.6

Both indices are below 1: behind schedule, as the question says, and over budget.

Answer (b)

Why not others:

  • •(a) 0.6, 0.75 — the two indices swapped
  • •(c) 0.75, 1.25 — 1.25 is actual cost over planned value, 100,000 ÷ 80,000, not an index on earned value; a CPI above 1 would mean under budget, yet $100,000 was spent for $60,000 of work
  • •(d) 1.25, 0.75 — uses the same ratio 100,000 ÷ 80,000 as the SPI, which would mean ahead of schedule, and puts the real SPI in the CPI column

Key rule: Earned value is always the numerator, SPI = EV ÷ PV and CPI = EV ÷ AC, and a value below 1 means behind schedule or over budget.

Project Management · AI-written, may contain errors

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