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

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:

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Speak Your Mind

  • 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.

  • 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?

  • 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”

  • 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?

  • 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

  • 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.

  • 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.

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

  • I have a question.please resolve

    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?

    • 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

  • 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 right answer is:
    The project was terminated early. At that time, it was over budget and ahead of schedule.

    Thanks

      • 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?

  • 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.

  • 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

  • Hi!
    Will u please help me to solve this problem?

    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?

    • 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.

  • 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.

  • 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.

    can an body please expedite.

    Question 02

    How to reconcile the concerned issues illustrated in Q 1

    Regards

  • Hi Fahad.

    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.

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

  • Hi Fahad,

    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?

  • 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

  • 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

    Answer:
    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

  • 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.

  • Hi Fahad Usmani,

    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

  • 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.

  • 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?

  • Hi Fahad;
    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.

  • 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?

  • Hi Fahad,
    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

    Thanks for your help,
    Cesar

  • Dear Farhad,

    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.

    Please guide !!

    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.

  • 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.

  • Hi Fahad –

    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.

  • 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

  • Dear Fahad,
    Thanks for your reply.
    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.

  • Dear Fahad,

    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.

      • Dear Fahad,
        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.

  • 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.

    • 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.

  • another question please :
    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

  • 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.

      • 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

    • 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.

  • Great explanation Fahad !

    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.

        • 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.

          • 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.

              • Thanks Fahad.

                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?

  • 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?

  • 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.

    • 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.

  • 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.

  • 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 ?

    your Sincerely . Majid

  • 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.

  • 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 ?

  • 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]

    • Hi Fahad,
      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

    • 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.

    • 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.

  • 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.

      • 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

          • Hi Fahad,

            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.

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