Key Stakeholder Insights
Question
In a project with a |'||¡ of $235,000, the CPI is 0.80, and the SPI is 1.20
Based on this information, which of the following can the key stakeholders determine about the project?
Answers
Explanations
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A. B. C. D.B.
The CPI (Cost Performance Index) is a measure that indicates how efficiently the project team is using its budget to complete the project work. It is calculated by dividing the earned value (the value of completed work) by the actual cost incurred.
CPI = Earned Value (EV) / Actual Cost (AC)
If the CPI is less than 1, it means that the project is over budget, while a value greater than 1 indicates that the project is under budget. If the CPI is equal to 1, it means that the project is on budget.
In this case, the CPI is 0.80, which means that the project is over budget.
The SPI (Schedule Performance Index) is a measure that indicates how efficiently the project team is using its time to complete the project work. It is calculated by dividing the earned value (the value of completed work) by the planned value (the value of work planned to be completed).
SPI = Earned Value (EV) / Planned Value (PV)
If the SPI is less than 1, it means that the project is behind schedule, while a value greater than 1 indicates that the project is ahead of schedule. If the SPI is equal to 1, it means that the project is on schedule.
In this case, the SPI is 1.20, which means that the project is ahead of schedule.
Therefore, based on the given information, the project is over budget (CPI < 1) but ahead of schedule (SPI > 1). The correct answer is C. The project is under budget and behind schedule.
