Cost Management, Oliver Lehmann query.

Submitted by sam12 on Wed, 07/21/2010 - 04:24

 


Hi folks,


Gotta doubt about a question from Oliver Lehmann (175q test)
Question 92.>Post-moretm analysis after scheduled finish date of a project shows a CPI of 0.8 and an SPI of 1.25. What is a plausible explanation for that?


A.) The project was terminated early. At that time, it was over budget and ahead of schedule.
B.) The project has produced additional deliverables which were originally not required.
C.) The project finished under budget and behind of schedule.
D.) The project finished over budget and ahead of schedule.


Out of the above two, I marked B due to the fact that SPI is >1. However for a component the EV cannot be greater than PV. So probably lets negate that.


However I did not understand how can we conclude that the project was terminated early?


Any thoughts there?


Regards,
Sam

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PMP / CAPM exam Question bank
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pkukilla

Wed, 07/21/2010 - 06:58

When the project gets completed  EV=PV  so SPI=EV/PV=1

 

sam12

Wed, 07/21/2010 - 07:29

Yes thats a know fact. How ,however, can one conclude that the project got terminated early if SPI=1.25?


Still Open question.


Regards,


Sam

pkukilla

Wed, 07/21/2010 - 07:38

If the project was not terminated  then EV=PV

whereas if the project is terminated EV IS NOT Equal to PV

Oliver F. Lehmann's picture

Oliver F. Lehmann

Thu, 07/22/2010 - 08:44

May I add a little refinement to you generally correct statement?

"If the project was not terminated  then EV=PV whereas if the project is terminated EV IS NOT Equal to PV"

This is only true when the scheduled finish date has been passed. An early finished project may have still have a PV >1, but the PV will go down over time and stay at 1 at the date of scheduled finished (better: Baseline finish).

Therefore, the prep question states that the scheduled finish has passed. After that time, a successfully finished project always has a PV=1.

The plain language answer:

During production, you may have created more value at a certain moment (called "Data date") than what was planned for that moment.

Then, SPI may be >1.

Once finished and scheduled finish date passed, there is nothing on top of being "finished". SPI can no more be >1

@Sam,

Each of my questions has a link reference to the PMBOK Guide, just like the real questions. You will find the confirmation there.

Oliver F. Lehmann, PMP
www.oliverlehmann.com