# Schedule Performance Index (SPI) & Cost Performance Index (CPI)

August 18, 2020

Schedule Performance Index (SPI) and Cost Performance Index (CPI) allow you to assess the project’s performance.

Schedule performance and cost performance are the two most important parameters of your project. SPI and CPI help you analyze the efficiency of any project.

Management is always looking at these parameters for any deviations from the baseline. Deviations from the baseline cost a great deal in project management. Therefore, it is important that you understand these concepts well.

Since these concepts involve mathematical calculations, many aspirants ignore them. Once you understand the math, solving questions on the PMP exam will be easy for you.

### Schedule Performance Index (SPI)

The Schedule Performance Index (SPI) shows how you are progressing compared to the planned project schedule.

According to the PMBOK Guide, “The Schedule Performance Index (SPI) is a measure of schedule efficiency, expressed as the ratio of earned value to planned value.”

The Schedule Performance Index gives you information on the time efficiency of your project.

#### The Formula for the Schedule Performance Index (SPI)

You can find the Schedule Performance Index by dividing Earned Value by Planned Value.

Schedule Performance Index = (Earned Value) / (Planned Value)

SPI= EV / PV

You can conclude that:

The completed work is equal to the planned work if the SPI is equal to one; the project is on schedule.

• You have completed more work than planned if the SPI is greater than one; the project is ahead of schedule.
• If you have completed less work than planned work if the SPI is less than one. The project is behind schedule.
• The completed work is equal to the planned work if the SPI is equal to one; the project is on schedule.

Make sure you consider all tasks while calculating the Schedule Performance Index. Sometimes, you may only consider those on the critical path and ignore the rest, which will give you an incorrect result.

Therefore, make sure that non-critical activities are included.

Example of Schedule Performance Index (SPI)

You have a project to be completed in 12 months, and the budget is 100,000 USD. Six months have passed, and 60,000 USD has been spent, but upon closer review, you find that only 40% of the work has been completed so far.

Find the Schedule Performance Index and deduce whether the project is ahead or behind of schedule.

Given in the question:

Actual Cost (AC) = 60,000USD

Planned Value (PV) = 50% of 100,000 USD

=50,000 USD

In the question, the Planned Value is not given. However, the project duration is 12 months and 6 months have passed. In this situation, you can assume the budget was distributed evenly for each month. Therefore, in 6 months, 50% of the budget will have been spent.

Earned Value (EV) = 40% of 100,000 USD

= 40,000 USD

Now,

Schedule Performance Index (SPI) = EV / PV

= 40,000 / 50,000

= 0.8

Hence, the Schedule Performance Index is 0.8

You are behind schedule since the Schedule Performance Index is less than one.

### Cost Performance Index (CPI)

The Cost Performance Index helps you to analyze the cost efficiency of the project. It measures the value of the work completed compared to the actual cost spent.

According to the PMBOK Guide, “The Cost Performance Index (CPI) is a measure of the cost efficiency of budgeted resources, expressed as a ratio of earned value to actual cost.”

The Cost Performance Index specifies how much you are earning for each dollar spent on the project. It shows how well the project is sticking to the budget.

#### The Formula for the Cost Performance Index (CPI)

You can calculate the Cost Performance Index by dividing the earned value by actual cost.

Cost Performance Index = (Earned Value) / (Actual Cost)

CPI = EV / AC

You can conclude that:

• You are earning more than what you have spent if the CPI is greater than one. The project is under budget.
• You are earning less than what you have spent if the CPI is less than one. The project is over budget.
• Earning and spending is equal if the CPI is equal to one. You can say that the project is proceeding as per the planned spending.

Example of Cost Performance Index (CPI)

You have a project to be completed in 12 months, and the budget of the project is 100,000 USD. 6 months have passed, and 60,000 USD has been spent, but upon closer review, you find that only 40% of the work has been completed.

Find the Cost Performance Index for this project and deduce whether you are under budget or over budget.

The following information is given in the question:

Actual Cost (AC) = 60,000USD

Planned Value (PV) = 50% of 100,000 USD

= 50,000 USD

Earned Value (EV) = 40% of 100,000 USD

= 40,000 USD

Now,

Cost Performance Index (CPI) = EV / AC

= 40,000 / 60,000

= 0.67

Hence, the Cost Performance Index is 0.67

This means you are earning 0.67 USD for every 1 USD spent since the Cost Performance Index is less than one. This means you are over budget.

You have studied variance (SV and CV) and indexes (SPI and CPI). If you think that both sets of parameters provide the same information, you are wrong.

Both are required because there is a difference between variances and indexes; the former provides you with the difference between the two values and the latter gives a ratio.

The result comes in dollar form in cost or schedule variance. A negative variance means the project is in trouble. However, the project is in good shape if the variance is positive. The problem with variance is that you cannot compare the health of the project with another, even if your organization has many projects.

Therefore, you use the Performance Indexes to compare the health of a project among many projects. The Performance Index is the ratio between the parameters, and a glimpse of these ratios will help you determine the health of the project. This makes it easier for you to compare the relative health of projects. You can find efficiency through indexes.

### Summary

Schedule Performance Index and Cost Performance Index help you analyze the progress of a project. These measures can help you determine if you are performing up to standard. You are doing well if the ratio is higher than one. If the ratio is less than one, there is a problem with the project and you should take corrective action. In ideal conditions, the ratio should be one.

This blog post is the fourth in a series of seven on Earned Value Management and project forecasting. Please read through my previous three posts before reading this post if you’re coming here from a search engine or a referral.

The following are the links for other blog posts:

### PMP Question Bank

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### PMP Formula Guide

This is the most popular Formula Guide for the PMP Exam. If you face difficulty with attempting mathematical questions for the PMP exam.

## Total Float Versus Free Float

• Hi.. How can i determine the WIP of the project per month?? is it by actual to date divided with target to date or actual to date divided with total target a year??

• Gopal says:

Below are few situations-
1. Planning was not done correctly. Hence, such deviation.
2. on 2nd Month, when PM realized that project has overshot the budget, team may have applied techncique such as Fastracking to increase the earned value.
3. Also, in short projects that are run for 3 to 6months, these changes are quite possible.

• fally fiona says:

I have a question. if cpi in 2nd month is 0.7 and 3rd month is 0.93..
compare the CPI for the 2nd and 3rd month? why this situation happen?

Cannot answer the reason behind it without reviewing the completing situation.

• Lauren says:

October 29, 2018 Sri posted an interesting question. I too am interested in the answer/explanation.
“A project team with a CPI of 0.78 is looking for options to reduce cost. Which of the following would be the BEST option to do so?
a. Reduce a test cycle in the system testing phase
b. Reduce scope by cutting down non-essential features
c. Add more resources to expedite the schedule
d. Revisit estimates and eliminate risks and then re-estimate”

As per my understanding, the correct answer is ” Reduce scope by cutting down non-essential features”.

• Taj says:

I did not see a response to Sri’s question, regarding how to reduce cost. How does one reduce cost, if the project is on schedule with a SPI of 1.0, yet the CPI is .923?

Which question?

• Nshiogu michael says:

where your spi =0.99 all the time, going by ur analysis , what should u do to to ensure that u are not behind?

0.99 SPI is Okay and acceptable.

• priya says:

very good explanation. Thank u

You are welcome Priya.

• Sri says:

A project team with a CPI of 0.78 is looking for options to reduce cost. Which of the following would be the BEST option to do so?
a. Reduce a test cycle in the system testing phase
b. Reduce scope by cutting down non-essential features
c. Add more resources to expedite the schedule
d. Revisit estimates and eliminate risks and then re-estimate

• Marie Miller says:

I came here via yet another random internet search in my quest of a self-imposed mission to gain a better understanding of EVM concepts. The materials I’m reading were just not providing that “light bulb” moment that makes the concepts come together. This is by far the best site I’ve discovered to date explaining earned value in a way that I GET IT! I now see EVM as a four-legged stool: Basics; variances; Indices, and forecasting formulas. Before seeing it broken apart this way, my ADD was wreacking havoc on my understanding and the overwhelming feeling of trying to categorize what seemed to be puzzle pieces not coming together! Cannot thank you enough for this work. Now, I can put some analytical thought against real program/project work.

Thank you Marie for your comment. I am glad that I could be of some help to you. Let me know if you need any further help.

if the spi is 1.22, how should the manager react?

The project manager should investigate the cause of the deviation.

• K Sheahan says:

Hi,
I’m trying to figure out the SPI when the PV is 0. The task isn’t scheduled yet and is complete so of course it’s ahead of schedule. The EV is 2000 but if the 2000 is divided by 0 then what is the SPI? This part isn’t making sense to me.

With zero PV, you can not calculate the SPI.

Hello.This post was really fascinating, particularly because I was looking for thoughts on this topic last Thursday.

Hello Lauren, I am glad that I could be of some help to you.

• Abbas says:

You are the project manager of the GHY Project. This project is scheduled to last for one year and has a BAC of \$4,500,000. You are currently 45 percent complete with this project, though you are supposed to be at your second milestone which accounts for half of the project completion. There have been some errors in the project which has caused you to spend \$2,073,654. What is this project’s schedule performance index?

• mide says:

0.9

BAC= 4,500,000

EV = 2,025,000 (0.45*BAC)

PV= 2,250,000 (0.50*BAC)

SPI = EV/PV i.e. 2,025,000/2.250,000 = 0.9

Project is behind schedule

Thanks for sharing Don.

• Jim D says:

How do you calculate CP?

Hello

I don’t understand how can I know that a project has been terminated early using SPI and CPI?

An example from an exam:
Why the correct answer for the question: Post-mortem analysis after scheduled finish date of a project shows a CPI of 0.7 and SPI of 1.44. What is a plausible explanation for that?

The project was terminated early. At that time, it was over budget and ahead of schedule.

Thanks

The data shows you are ahead of schedule and over budget.

What are the other options?

• Nisim says:

I found another question from Oliver free preparation exam:
You found the following earned value analysis information for a project that was recently closed out: SPI = 0.7 , CPI = 1.0
A. The project has been cancelled while it was executed. At that time the project was behind schedule and on budget.
B. The project’s deliverable have all been finished. The project came in behind schedule but on budget.
C.The project’s deliverable have all been finished. The project came in ahead of schedule but on budget.
D. The project’s deliverable have all been finished. The project came in on schedule but over budget.

Correct answer is A. Why is that?

• Jim D says:

Because you have an SPI value below “1” which means that the planned value (PV) has not been realized and therefore the project is not complete.

• Hegde says:

This was the answer I was looking out for!! Thank you Jim!!

• Sowmya says:

You found the following earned value analysis information for a project that was recently closed-out:

SPI = 0.7, CPI = 1.0

What is the answer from the below options
a. The project has been cancelled while it was executed. At that time the project was behind schedule and on budget
b. The project’s deliverable have all been finished. The project came in behind schedule but on budget.

You are behind the schedule and on budget. So the answer “a” would be correct.

• PG13 says:

You cannot be behind schedule and on budget. You may have spent as much as what was budgeted to date, but not on budget, program wise. Projected out to finish all planned tasks, you will be over budget.

• Yasmin says:

Option a. behind the schedule and on budget

• Lai says:

Quick question on this scenario:

It is the end of the project already and SPI is 0.9. Which is the best answer?

– The project is behind the schedule
– The project did not complete all the activities and is behind schedule

What is the difference between these two?

• Sukhdeep Singh says:

It suggests the project was terminated before completion.

At completion the SPI is always marked as 1 irrespective of when the work was completed.

• Pam says:

EV at completion should be 1. If it is less than 1, it means that some activities were not completed…so the second statement is correct.

• Dronesh Joshi says:

the second one..is the best fit for the question

• Nayab says:

Hi!

Design and plot a critical ratio for a computer installation project that had planned constant linear progress form o to and earned value of 200 over a 100-day duration. in fact progress for the 20 days has been: 2, 3, 4, 6, 7, 9, 12, 14, 15, 17, 20, 21, 22, 24, 26, 27, 29, 31, 33. what can you conclude about this project?

• damien says:

Earned Value = 33, Planned Value = 40. SPI = 0.825. So project is behind schedule (SPI<1). They do not give actual cost, so cannot say anything about CPI.

• Shane Thompson says:

Hi all,

We running a multi year project in a country that has an inflation of 5% year on year. We were requested to submit our budget in nominal and real terms.

Is it correct to measure the project in nominal terms or real terms?
My logic says to calculate the CPI, I would calculate EV in nominal terms using the nominal budget so that it can be compared against the actual (also in nominal).

Currently my project’s EV is being calculated using the real term budget (2014 terms) being compared against actuals incurred from 2014 to 2016.

Your thoughts and experience in such a situation would be welcomed.

• Bill says:

What is the ideal value of CPI?

It should be 1.

• Mehar says:

Dear all

Kindly consider the following stage of the project of const Works
CPI=0.66
SPI=0.52

PV as per PRimavera is 9.3 Bn
EV as per Priamavera is 8.9 Bn

Question:1
In order to calculate the AC of the project to get a cross check i used CPI= EV/AC

but the cost i am getting AC doesn’t matches the actual cost.

Question 02

How to reconcile the concerned issues illustrated in Q 1

Regards

• MOHAMMED says:

IN MY PROJECT CPI IS MORE THAN 1.4 AND SPI IS 0.8

This means you are behind the schedule and under budget.

• MOHAMMED says:

is der any thing wrong with c.p.i
as my p.m says that it should not be like this..

Yes, ideally it should be near to one. 1.4 means your cost estimation was wrong.

• Rea says:

If CPI>1 ans SPI<1 at project end-does it mean project has been terminated in middle?
Why?

If SPI < 1, you are behind schedule and work is not completed. So you can say that the project is terminated.

• Elina says:

I would like you to explain this.

What impact would there be on PV, AC, EV, CV and SV if there are early start of activity OR late start of activity?

Hope you can explain the impacts!

Thanks!

From the information given in your question I can say that:

If the activity is on critical path, and it is delayed, the project will delay. However it is finishing earlier, the project will finish earlier. Also watch for other paths in your network.

If the activity is on non-critical path, it does not matter if it delays until all float is consumed. After that the project will start delaying.

• Bernard says:

Which of the following ideal at the end of a project; a. AC=EV. b. EV=PV. c. AC=PV. d. CPI=1

At the end of the project you will earn all planned value, so as per my understanding EV = PV will be the right answer.

• Tim says:

Before you make any progress against either the CPI or SPI, meaning you have started that scope of work yet, I assume you should set the CPI or SPI to 1, correct?

ie: If CPI = EV/AC, and EV and AC = 0, should we set CPI to 1 which forecasts everything in that part of the scope as on budget?

If PV=AC=EV meaning you are on schedule and on budget. If AC is zero means you did not spend a single penny on it.

Hello,

If you have a project that is complete and the CPI=1 and the SPI=237 on an expedited project is this a valid way to represent that the project completed significantly ahead of schedule?

Are you sure that SPI = 237?

If SPI = 2 this means you have completed the project in half time.

• Priya says:

some information did not appear:
IF
Bob’s Account: 60% work done after 15 hours
Sue’s Account: 75% work done after 25 hours
Roger’s Account: 10% work done after 5 hours
Mike’s Account: 50% work done after 30 hours
Jill’s Account: 80% work done after 15 hours

• Priya says:

Question: Allen is managing a new product development project. • The project estimates include a total of 100 hours of development time. • There are five separate tasks that will take 20 hours each. • Each task has 4 subtasks that take 5 hours to complete. • Allen hires five programmers will each have twenty percent of the work that can be completed concurrently. • Each programmer will charge \$100 per hour. Total budget for the project is \$10,000. • Based on the distribution of work, it is determined that the project can be completed within one week. Initial Reports • At the end of the week, the programmers turn in time sheets. • A total of 90 hours is reported.
Find CPI, SPI

Budget=\$10,000 for 100 hours
PV @90Hours= 0.9×10000 = \$9,000
AC=\$9,000 for 90 hours
Each Work Component budget (considering 5 workers) = \$10,000/5= \$2,000
EV for Bob’s Account: 0.6×2,000=\$1,200
EV for Sue’s Account: 0.75×2,000=\$1,500
EV for Roger’s Account: 0.1×2,000=\$200
EV for Mike’s Account: 0.5×2,000=\$1,000
EV for Jill’s Account: 0.8×2,000=\$1,600
TOTAL Earned Value = \$5,500 (addition of PV of all 5 workers)

SV=EV-PV; i.e. \$5500-\$9000= \$-3,500,
SPI=EV/PV; i.e. 5500/9000=0.6

• Priya says:

Allen is managing a new product development project. • The project estimates include a total of 100 hours of development time. • There are five separate tasks that will take 20 hours each. • Each task has 4 subtasks that take 5 hours to complete. • Allen hires five programmers will each have twenty percent of the work that can be completed concurrently. • Each programmer will charge \$100 per hour. Total budget for the project is \$10,000. • Based on the distribution of work, it is determined that the project can be completed within one week. Initial Reports • At the end of the week, the programmers turn in time sheets. • A total of 90 hours is reported.
Bob worked 15 hours and 60% work is done.
Sue worked 25 hours and 75% work is done.
Roger worked 5 hours and 10% work is done.
Mike worked 30 hours and 50% work is done.
Jill worked for 15 hours and 80% work is done.
Find CPI, SPI, Health of Project.

• shyama says:

Thanks for your reply.. However, for the above options, both options 1 and 2 seems to be correct.

Could you pls let me know the correct answer.

Thanks

If the cost variance is positive, this means you are under budget. Option “b” is the best answer.

• shyama says:

1.. If CV is 1.02, wat does it means?
a) Its in on budget
b) Its within budget
c) It is over budget.

• GHANDOUR says:

hello.
what we can do if SPI >1 ??
What do you propose to deal with this case?

thank you

If it is consistently too high, you will check your estimate.

• Frances says:

When I look at the formulas and the examples, it seems to assume that costs are spread evenly throughout the project (eg. 3 consultants working from start to finish of the project).

but in fact most projects have costs varying from month to month. eg. there may be purchase of software or equipment that spikes costs in certain months.

would these situations be accurately covered by EV, PV CPI etc?

In that you will see your schedule to find the value of PV, you have the AC, and you can find the EV. Once you get these figure, you can run your analysis.

• Tayseer Sayyid says:

Is it possible for a project to have SPI > 1 and CPI >1 (assuming a scenario where the project progress is slow, and the project is already running over budget)? What are the mitigation measures?

It is possible. For the mitigation plan, you need to find the causes first and then you will be able to correct it.

• Brian says:

Great post. I’ve read it and will be reading the rest of them as well.
You state that “A consistently high or low value of SPI or CPI is an indication that something is wrong with your planning and/or cost estimates. In this case, check all assumptions and estimates for their correctness and take corrective action if needed.”
I agree with your statement. I was wondering if you can suggest what you would consider “high”. One of our contractors is claiming a CPI of 1.88. To me this is very high and unreasonable. I’m just wondering what your thoughts on the subject are?

Ideally it should be near to one, but around 1.1 can be acceptable and can be bring under control.

No doubt 1.88 is tool high.

What is high or low, it is subjective discussion however as you move upward things started getting worse.

• Corina says:

Performance Index Method
These are the indexes I pull from one of our projects:

CPI / SPI / CSI
11.16 / 0.87 / 9.73

So, it means that we are under-budget and behind the schedule, correct?

• CesarV says:

I am going bananas trying to solve this problem— I think I am over-complicating it. Can you please advise?
If I have 4 tasks with several % completions and some AC and PV data can I use those to calculate both the SPI and CPI?

A:100% complete. AC=3000, PV=2500
B:100% complete. AC=4000, PV=3000
C:85% complete. PV=6000
D:55% complete. PV=2000

Cesar

• Reshma says:

Thanks for your blogs. I have just started reading PMP material & this is really well explained.

But i am completely confused with this eg., could be as i am just understanding concepts. In the real world this scenario doesn’t seem to be possible, at the same time it also raises a question for me.

If i try to make this real, as an eg. i have to consider EV & CV as 20000 and PV as 80000. This means that i had considered 80% completion of work when actually only 20% has been completed. This is really bad but we say that having CPI > 1 means we are on schedule. Aren’t these 2 scenarious completely contradictory. Here we are saying that Cost spent is as per expectation but projection which has been done (PV) is completely wrong. Thus how can CPI justify perfectness of project schedule or even mean that cost is being spent as expected.

Thanks and Regards,
Reshma

There is a difference between real world situation and virtual data. While making a question, you may select any virtual data to check the analytic skill of a candidate. You should not worry about it.

What does it mean if CPI is more than SPI?

You should compare apple to apple.

What does mean by apple to apple

SPI shows the schedule performance and CPI shows the cost performance. You can not compare the SPI with CPI.

• vpt says:

Dear sir,
thanks for this nice article.
could you please tell me how the PV is calculated if project is delayed? As we calculate as per the initial dates then PV exceeds the budget. Or do we need to make a new baseline and then calculate the PV with respect to delayed date?
thanks,
vpt.

You will calculate the PV based on the current schedule. If you are behind the schedule, can not recover it, you must change the schedule baseline.

• Anwar Kamal says:

Thanks for sharing knowledge here …i just started here..shortly we will discuss a lot.
regards

You are welcome Anwar.

• Lisa says:

Quick question. SPI is EV/PV; what about when change orders are added and your PV suddenly changes? Some of the CO’s added are already complete by the time they are added into the schedule; other times, the planned dates for change orders need to be adjusted, otherwise the SPI does not seem to calculate properly. Any thoughts on this?

Thanks,
Lisa

Once any change request is approved, baselines will be updated, and you will calculate the PV as per the current situation.

• raghavendra mohare says:

I have a project where the CPI is 0.74 & SPI is 0.98. However the tracked MSP schedule shows a variance(delay) of 45 days.

Can anybody comment what’s wrong or what is the situation of project based on this. The project duration is 1500 days & 365 days have passed.

Raghu

Actually, I want to ask that how to relate SPI with project time duration?
For example, if SPI is 0.66, it tells us, we are behind schedule but question is this how much behind in terms of project time?
If, I devide project time duration which is 9 months by SPI which is 0.66 then estimated project time duration would be 13.6 months. Is this approach right or wrong?

You can compare your actual progress with the planned progress (schedule baseline). This comparison will show you that how much you are lagging.

Here is an example;
BAC = 90 millions
Project Time = 9 months

After one month;
EV = 10% (i-e 9 millions)
AC = 10 millions &
PV = 13.5 millions

After calculation;
CPI = 0.90 (it means project is over budget) & EAC = 100 millions
SPI = 0.66 (it means project is behind schedule) & EAC = 136 millions

Now, my question is that how should I relate CPI & SPI with time duration of project (i-e 9 months) ?

If, I devide time duration of project by SPI, it tells us estimated time duration of the project is 13.6 months and in this case estimated cost would be 136 millions.

Is my approach is right or wrong ?
If No, please explain right approach, if Yes, then,
Can I also use CPI to calculate estimated time duration of the project ? And in this case estimated cost would be relative cost ?

You don’t have to relate CPI with SPI.

These two are different parameters. CPI tells you about your cost performance and SPI tells you about schedule performance.

Thank you very much for your response.
Its OK, but my question was how to relate specially SPI with time duration?
For example, SPI is 0.66, it means that we are behind schedule, but how much we are behind in terms of time duration?
The approach I adopted is right or wrong? i-e devide project time duration (9months) by SPI (0.66) and the estimated project time duration would be 13.6 months.

• Giannis says:

Hello and congratulations for your blog. How to calculate the SPI when an activity start before schedule? I tried and i cant calculate it because the lower part of the fraction (planned value) equals to zero. Thanks in advance.

You need to review the you schedule first.

To calculate the SPI you should have EV and PV on hand.

• Giannis says:

I have already calculated EV and PV, but for example EV = 5000 and PV = 0 because the task has begun ahead of schedule. Then it’s impossible to calculate SPI for this condition.

• Satrajit says:

Incase you are ahead schedule, why would you calculate SPI..You should party till next milestone arrives. 🙂

If the difference is small, it is okay otherwise you must find the cause for it.

• Emilia says:

Why can we use CPI to correctly forecast EAC, but cannot use SPI to correctly forecast schedule at completion?

There is another term called To complete schedule performance index. I don’t understand that why the PMI has not included it in the PMBOK Guide.

In calculating EV i use % complete in terms of quantity, ex. we have a planned quantity of 1000 cubic meters of reinforced concrete to be finished in 8 months with BAC of 6000000 , as to date we completed 100 cubic meters so the EV = 0.1(100/1000) * BAC
is this right and accurate ?
Regards

Let us use the simple mathematics.

The cost of 1000 cubic meter concreting is 6,000,000 USD.

This means cost of 1 cubic meter concreting will be = 6,000,000/1000
= 6,000 USD

Therefore, the cost of 100 cubic meter concreting = 100 *6,000
= 600,000 USD

Hope it helps.

Hi,
When calculating SPI , you calculated PV as % complete * BAC ( 50 % in the example as six months has passed from a one year duration project ) , but isn`t this way may be deceiving sometimes ? as it assumes that the budget is divided equally along the months of the project duration . Would it be more accurate to get the actual planned amount to date and use it as the PV ?
Regards

If the concept is clear, you can not be deceived. I took the simplest example to make concept clear.

• Aseem says:

Hello sir can you help me in solving one problem

There a project A which is to be completed in 20 days but it gets completed in 10 days.
And Planned value = Actual cost

What will be the CPI & SPI of the project and how?

Since the project is completed, this means SPI = 1

SPI = EV/PV

1 = EV/PV

EV = PV

Now CPI = EV/AC

According to the question, AC = PV

And PV=EV

This means,

CPI = EV/EV
= 1

Hence SPI and CPI both will be equal to 1.

Hope it helps.

• Aseem says:

Yes sir it really helped
Thanks a lot!!!

But sir can SPI & CPI be 2 or more or can it be negative?

And sir what will be the CPI & SPI to the same problem

If the same activity was to be completed in 20 days but it got completed in 140 days

SPI and CPI depends on EV, PV and AC. These are ratios and can not be negative.

Regarding your next doubt, you can analyse it with same logic.

• Aseem says:

Thank you sir…but cal elaborate a little…

Can SPI be 2?

And for the second question

Is SPI = 20/140 = 0.14

Acc to the logic?

The logic says, SPI = EV/PV

Mathematically you can come with any number and get the result.

• k.s. says:

Hello,

Do you think CPI and SPI would help determine whether the project is behind or ahead of schedule?

K.S.

Yes, Schedule Performance Index (SPI) helps you determine whether the project is behind or ahead of schedule.

• ilyas says:

sir Fahad Usmani sb would you like to send me primavera p6 notes?

I will search for it, will send you if I get something.

• Hello, do you have CPI and SPI benchmarks recognized internationally? And do You have them in thé hi-tech RD businesses?

Regards and thanks
Pierre

General understanding says that it should revolve around 1. Some organizations are comfortable with 0.9 to 1.1 and others are not.

It is up to your organization to decide the benchmark for them depending on their risk tolerance.

• Gaurav says:

One question I have..
If SPI is less than 1.. say 0.6… of course it means we are behind the schedule..does it always mean that deliverable have not been met ?
Can it be possible that project is complete with all deliverable accepted by customer.. but SPI is still 0.6 ?

Thanks

Deliverable can be met even if the project is behind schedule.

It is not possible to complete the project and spi is still 0.6 because once the project is complete, no work left and spi = 1.

• Gaurav says:

• Som says:

How is that possible Fahad – Deliverables are met, but the project is behind schedule? Can you elaborate?

Suppose you are working a multi-year project, and you have to deliver some deliverables at some intervals.

And if you deliver a few of these deliverables late, you will say that although the deliverables are met but the project is behind schedule.

• Som says:

Still could not get it. Let us a say Project X has 3 deliverables – D1, D2 and D3. D1 will be on Day 15, D2 will be Day 30 and D3 on Day 45.

If I am saying on 45th Day that D3 will be delivered on Day 50, then – Project is behind schedule. But are the deliverables met? No. Then saying that D3 is met – is not it wrong?

In such a case – yes, D1 and D2 are met and SPI will be 1 for them, but will be D3 be of SPI = 1? And more importantly will project be at SPI = 1? No. As Cumulative SPI will pull it below 1.

Or am I understanding differently?

Yes, you’re right.

In this case you were proceeding in correct direction until you deliver D2, however, after delivering it you deviate and the schedule is delayed.

• Som says:

The correct wordings would be – Project can be delayed and SPI can&will be below 1, however some deliverables can be met, but NOT all. When i read first time, it felt like “Project can be delayed, but deliverables are met – meaning all”, which is not the case.

Btw, what will be you take on CPI in such a case for D1, D2, D3 and the complete Project after the project is delivered (i.e.,delayed and delivered)? Will it be 1 for all or different?

Regarding CPI, you need to see how much you have earned and how much has been spent.

• Gnpth says:

Hi Usmani,

I just have one question.

Whether the task type of each task have impact on SPI, CPI and other EVM Metrics?.

for example, will the fixed duration tasks impact on SPI and CPI differ from the SPI and CPI values for fixed units and fixed work? if so, how?

I did not understand what you want to ask?. Can you just clarify it again…

• Gnpth says:

I mean,

Does the task types (fixed duration, fixed work and fixed units) plays hand in determining the CPI and SPI values?

• Stefan says:

on the start of the project these will allow you to determine your baseline. all your work is compared to the baseline.

• Mia67 says:

Hi,

Just a question: If you have both PV, EV and AC for 6 tasks, how to calculate the SPI for the work package /6 tasks/?

SPI = Schedule Performance Index.

As the name suggests, SPI is calculated for the schedule not for any individual activities, task or the work package.

In your case, you will roll all activities up and then calculate the SPI.

These information are used in Performance Report to show the progress and/or forecast for the project to the management. Management want to see the whole picture at broad level, they wouldn’t be interested in seeing the status of thousands of activities or hundreds of work packages.

• M Alam says:

the key to calculate spi/cpi at work package level is to know the percentage completion of work package. for example – planned efforts are as follows for each work item – requirement gathering = 40 hrs, design = 100 hrs. Build and Test = 200 hrs. %completion of each work item, requirement gathering = 100%, design = 40%, build and test = 20%. So, work package completion can be calculated as – (40*1+100*0.4+200*0.2)/(40+100+200) = 120/340 = 6/17 = ~30%.
once you know the percentage completion at package level, you can calculate spi/cpi at package level by summing up efforts of each items and considering earliest start date and latest finish date of the project/package.

Well said Alam.

• realist says:

You say in your explanation that the performance index value lies between 0 and 1. However, the CPI and SPI values can exceed 1 in the project is doing well.

That was an error – Corrected.

Thanks for pointing it out.

• Majid says:

Hi

can you help me at this Exercises for cod source

Assumed: I have a 8 task and 50 day

my teacher say student must Design gant chart With c# and 3input text file ?

Sorry Majid, I’ve no idea about it.

• Majid says:

I have spi and cpi
1-then my teacher say why[spi and cpi ]is bad ?(or why cpi , spi bad indicator ?)
2-and what approach for Alternative [cpi , spi]?

Thanks

SPI and CPI are just an indicator that in which direction your project is leading. CPI and SPI are good or bad, it depends in condition of your project.

• majid says:

hi
can u say, what are they is good or excelent?
from cpi or spi?

if ur answer no exellent ru have a approach for this ?

Hello Majid,

I did not get your question correctly, can you just explain it again.

• Maya says:

In this blog u said that for every rupee v r earning .67 but, if cpi<1 doesnt thar mean we are running over budjet and we dont have enough money ?

It means we are over budget and if no corrective action is taken then funds may finish soon.

Thanks a lot

when calculating the CPI and SPI values, do we have to multiply it by 100% to get a percentage value?

No, you do not need to multiply it by any number.

• Amir Arif says:

Sanjiv, these are ratios, not percentages.

• rashmita says:

hello sir,can you please solve out a problem.i have given a project and details of the project are….
Your company is doing well and has a profit of about \$25,000 that you need to invest. The money is currently in a savings account earning an interest of 5% per annum and is guaranteed for the next 5 years.
You want to make your profit work harder so you have looked at some investment opportunities available. They are
• To insulate the current company offices at a cost of \$10,000 which will provide a fuel savings of \$1,500 per year over the next 10 years.
• To pay the lump sum of \$15,000 to the mortgage of \$50,000 that has a loan term of 10 years at 7% interest per annum.
• To invest \$15,000 into a new business, which has been estimated to return double the amount in 5 years’ time.

(a) Given the profit you have and assuming a discount rate of 5%, perform and document appropriate NPV calculations for all possible investment options you identified. You can work out your calculations using Microsoft Excel. Ensure you
[8 marks]
(b) From your calculations in (a), which investment would you take up and why?
[2 mark]

Question 2 (10 marks)
You are building a new office for your company. After some discussion with your builder, you identified some of the key tasks, the duration and the costs to complete the build. As you are a project manager you have decided to monitor the progress of their build using Earned Value Management (EVN). Answer the following questions using the following information

ID Task Name Cost (\$) Start Date Duration
1 Lay foundations 40,000 April 1, 2013 2 weeks
2 Build frame 27,000 April 2013 4 weeks
3 Install pipes and electrical 20,000 May 2013 6 weeks
4 Make house water-tight 50,000 July 2013 8 weeks
5 Install internal walls and bathroom 25,000 September 2013 12 weeks
6 Install cabinetries 10,000 December 2013 4 weeks
7 Paint house 6,000 January 2014 2 weeks
8 Install light fixtures and appliances 3,000 January 2014 2 weeks

NOTE: Assume that no task is scheduled to run concurrently, e.g., Task 2 starts after Task 1 completes, Task 3 starts only when Task 2 completes, and so on. Also, assume that each month is made up of exactly four weeks.
(a) What is the planned value of the entire project?
[1 mark]
(b) The project manager has managed to keep cost to what was originally budgeted above. At this point, the project has completed Task 4. Up to this point,
i. What is the planned value of the project?
ii. What is the actual cost (AC) of the project? Briefly explain how you derive the actual cost.
iii. What is the rate of performance (RP) for each task? Using the RPs obtained, calculate the earned value (EV), schedule variance (SV), Cost Performance Index (CPI), and Schedule Performance Index (SPI) of the project.
[1 + 1 + 1 marks]
(c) Unfortunately, two trades resigned after Task 5 was completed and this caused the remaining tasks to exceed its original cost and schedule by 25%, 50%, 50% respectively.At the end the project,
i. What are the CPI and SPI?
ii. How is the performance with respect to cost and time?
iii. If the cost and schedule of the remaining tasks did not slip, how would the project perform (in terms of cost and time)?
[2 + 2 + 2 marks]

• Jason says:

this is a question from an assignment, so please ignore it and perhaps delete the question/posting.
Rashmita, I suggest you do some study as this is on the exam.

Regards

Jason

• Jacinto Mendes says:

HAHAHAHAHA I can’t believe it; someone actually posted this here.

I’m in SIT764 too.

• Ejike says:

cant stop laughing. It is a blog that answers questions though. So I dont need to solve my assignment . Please solve your school assignment afterall.

• Stefan says:

you have your budget. create a schedule. make WBS for each area & resource load. baseline the schedule. you cannot get any calculation other than one if your performance is 0. if you do nothing, you cannot compare.
all of the areas can be separated for the analysis, and aggregate.

• Amir Arif says:

I can’t believe that you even pasted the marks of the questions. LOL

• Taylor says:

How would you explain a situation in which the CPI is greater than 1 but the SPI is less than 1?

If CPI is greater than one, it means that you’re under budget. If SPI is less than one, it means you’ re behind the schedule.

These parameters are simple telling you that; although, you are spending less money to complete the work but you are moving very slowly. You must speed up activities to cover up the schedule delay.

• Atul Kr Rastogi says:

the PM is spending less or is constrained to spend and as a result the project is moving slowly.

Moving slow? You mean behind the schedule?

• Sitara says:

Hi! If you have a CPI = 1 and a SPI = 0,2, would you then expect the project to be over-budget by the end? Let's say they should have finished by year end, but instead they decleare to finish about May next year.
Also, there will be no reduction in resources on the way.
It seems to me, there is a contradiction between having av SPI<1 and a CPI=1, as long as the project is still ongoing for some time, and amount of resources is not reduced…

• Hello Sitara! Thanks for visiting my blog.

As you said if the CPI = 1 and SPI = 0.2, I would say that this condition is really bad or I should say that the project is in worst shape and something terribly wrong with the schedule. In this case the project manager will review the project schedule and the network diagram. There must be some mistakes with it otherwise the condition you mentioned is rare.

Let us say that the schedule is OK, then the project manager has two options to complete the project, either by fast tracking or by crashing. If he can manage to complete the project by fast tracking then he would not be needing any extra money otherwise a fresh cost estimation will be required.

• Ram says:

Hi Fahad. Good discussion. In this case, we see the budget is exhausted. So how could we say fast tracking/crashing will not require additional money is in both cases additional resources will be required to complete the job.

Thanks
Ram

Since the CPI is 1, the project budget is not exhausted.

• Pennie Kho says:

With CPI=1 and SPI=0.2, this indicates either the schedule is not resource loaded for CPI calculations or the activities progress are exaggerated.

Mainly because the SPI indicates the project would be extended 3.2 x the original duration, hence the budget should have been affected obviously and the CPI should already been reflecting that.

Well said.

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