CPI & SPI

11.

 You found the following Earned Value Analysis information for a recently closed out project:

SPI = 0.7, CPI = 1.0

The project has been cancelled while it was executed. At that time the project was behind schedule and on budget.
The project's deliverables have all been finished. The project came in behind schedule but on budget.
The project's deliverables have all been finished. The project came in ahead of schedule but on budget.
The project's deliverables have all been finished. The project came in on schedule but over budget.

I am Unable to undertand Why the answer is a)

b) can be answer too pl. can anyone explain ?

Schedule performance Index (SPI) = EV/PV is an indicator whether the project is on time (SPI = 1) or behind the schedule(<1).  Here SPI being 0.7 means the project got completed only 70% of the planned portion in the scheduled time i.e. the project is running behind the schedule.

Cost performance Index(CPI) = EV/AC is an indicator whether the project is incurring expenses more than(CPA<1)/less than(CPI >1)/ equal to (CPI = 1)the budget allotted at that stage.  Here CPI = 1 means the Earned Value and Actual Cost incurred are equal. 

Choice A is the only answer that satisfies both these criteria.

 

Chandra

thanks for the reply...

but both a) and b) say same thing behind schedule & on budget

exept

option a) project has been cancelled

option b) all devilerables have been finished

so which one to pick ?

If the deliverables have been finished, your SPI = 1 (eventually) but here the SPI is explicitly stated as 0.7 i.e. only 70% of the planned work has been achieved so far.  So there is still work (30%) to be done inorder to complete the deliverables.  So choose A.

 

Chandra

Got it.... 

Thanks Mr. Chandra for the reply

 

Got it.... 

Thanks Mr. Chandra for the reply

 

 In this question, its clear that project is closed and a low value of SPI is showing that all works are not completed, hence its terminated but what if the question has just given these SPI and CPI values without telling that project is closed. Does the answer remains the same, if Yes, how to determine that its canceled or our answer will become (b). Can any one explain.

 When the project is closed EV-PV=0 whereas when the project is cancelled EV-PV wont be zero. Hope this make sense

 Still not,

you are right when project is closed EV - PV = 0, but this stage can be acheived during the project before closing, at any stage we can be earning same as much we have planned, at that stage EV - PV = 0 but project is not closed.

EV - PV not equal to zero, if terminated, that makes sense though.

Thanks, waiting ur reply.

We use Elimination approach:

SPI = EV/PV =0.7 <1 => EV< PV: project is behind the schedule

CPI = EV/AC =1.0     => EV=AC: project is on budget

(A) and (B) are sactified those condition.

Next, the project's deliverables could not be finished yet bcoz it's behind the schedule.

Therefore, A is correct answer.