Schedule Performance Index (SPI) & Cost ... - PM Study Circle

The Schedule Performance Index (SPI) shows how you are progressing compared to the planned project schedule. According to the PMBOK Guide, “The Schedule ... SchedulePerformanceIndex(SPI)&CostPerformanceIndex(CPI) May8,2012 FahadUsmani,PMP SchedulePerformanceIndex(SPI)andCostPerformanceIndex(CPI)allowyoutoassesstheproject’sperformance. Scheduleperformanceandcostperformancearethetwomostimportantparametersofyourproject.SPIandCPIhelpyouanalyzetheefficiencyofanyproject. Managementisalwayslookingattheseparametersforanydeviationsfromthebaseline.Deviationsfromthebaselinecostagreatdealinprojectmanagement.Therefore,itisimportantthatyouunderstandtheseconceptswell. Sincetheseconceptsinvolvemathematicalcalculations,manyaspirantsignorethem.Onceyouunderstandthemath,solvingquestionsonthePMPexamwillbeeasyforyou. SchedulePerformanceIndex(SPI) TheSchedulePerformanceIndex(SPI)showshowyouareprogressingcomparedtotheplannedprojectschedule. AccordingtothePMBOKGuide,“TheSchedulePerformanceIndex(SPI)isameasureofscheduleefficiency,expressedastheratioofearnedvaluetoplannedvalue.” TheSchedulePerformanceIndexgivesyouinformationonthetimeefficiencyofyourproject. TheFormulafortheSchedulePerformanceIndex(SPI) YoucanfindtheSchedulePerformanceIndexbydividingEarnedValuebyPlannedValue. SchedulePerformanceIndex=(EarnedValue)/(PlannedValue) SPI=EV/PV Youcanconcludethat: ThecompletedworkisequaltotheplannedworkiftheSPIisequaltoone;theprojectisonschedule. YouhavecompletedmoreworkthanplannediftheSPIisgreaterthanone;theprojectisaheadofschedule.Ifyouhavecompletedlessworkthanplannedwork,iftheSPIislessthanone.Theprojectisbehindschedule.ThecompletedworkisequaltotheplannedworkiftheSPIisequaltoone;theprojectisonschedule. MakesureyouconsideralltaskswhilecalculatingtheSchedulePerformanceIndex.Sometimes,youmayonlyconsiderthoseonthecriticalpathandignoretherest,whichwillgiveyouanincorrectresult. Therefore,makesurethatnon-criticalactivitiesareincluded. ExampleofSchedulePerformanceIndex(SPI) Youhaveaprojecttobecompletedin12months,andthebudgetis100,000USD.Sixmonthshavepassed,and60,000USDhasbeenspent,butuponcloserreview,youfindthatonly40%oftheworkhasbeencompletedsofar. FindtheSchedulePerformanceIndexanddeducewhethertheprojectisaheadorbehindschedule. Giveninthequestion: ActualCost(AC)=60,000USD PlannedValue(PV)=50%of100,000USD =50,000USD Inthequestion,thePlannedValueisnotgiven.However,theprojectdurationis12monthsand6monthshavepassed.Inthissituation,youcanassumethebudgetwasdistributedevenlyforeachmonth.Therefore,in6months,50%ofthebudgetwillhavebeenspent. EarnedValue(EV)=40%of100,000USD =40,000USD Now, SchedulePerformanceIndex(SPI)=EV/PV =40,000/50,000 =0.8 Hence,theSchedulePerformanceIndexis0.8 YouarebehindschedulesincetheSchedulePerformanceIndexislessthanone. CostPerformanceIndex(CPI) TheCostPerformanceIndexhelpsyoutoanalyzethecostefficiencyoftheproject.Itmeasuresthevalueoftheworkcompletedcomparedtotheactualcostspent. AccordingtothePMBOKGuide,“TheCostPerformanceIndex(CPI)isameasureofthecostefficiencyofbudgetedresources,expressedasaratioofearnedvaluetoactualcost.” TheCostPerformanceIndexspecifieshowmuchyouareearningforeachdollarspentontheproject.Itshowshowwelltheprojectisstickingtothebudget. TheFormulafortheCostPerformanceIndex(CPI) YoucancalculatetheCostPerformanceIndexbydividingtheearnedvaluebytheactualcost. CostPerformanceIndex=(EarnedValue)/(ActualCost) CPI=EV/AC Youcanconcludethat: YouareearningmorethanwhatyouhavespentiftheCPIisgreaterthanone.Theprojectisunderbudget.YouareearninglessthanwhatyouhavespentiftheCPIislessthanone.Theprojectisoverbudget.EarningandspendingareequaliftheCPIisequaltoone.Youcansaythattheprojectisproceedingaspertheplannedspending. ExampleofCostPerformanceIndex(CPI) Youhaveaprojecttobecompletedin12months,andthebudgetoftheprojectis100,000USD.6monthshavepassed,and60,000USDhasbeenspent,butuponcloserreview,youfindthatonly40%oftheworkhasbeencompleted. FindtheCostPerformanceIndexforthisprojectanddeducewhetheryouareunderbudgetoroverbudget. Thefollowinginformationisgiveninthequestion: ActualCost(AC)=60,000USD PlannedValue(PV)=50%of100,000USD =50,000USD EarnedValue(EV)=40%of100,000USD =40,000USD Now, CostPerformanceIndex(CPI)=EV/AC =40,000/60,000 =0.67 Hence,theCostPerformanceIndexis0.67 Thismeansyouareearning0.67USDforevery1USDspentsincetheCostPerformanceIndexislessthanone.Thismeansyouareoverbudget. Youhavestudiedvariance(SVandCV)andindexes(SPIandCPI).Ifyouthinkthatbothsetsofparametersprovidethesameinformation,youarewrong. Botharerequiredbecausethereisadifferencebetweenvariancesandindexes;theformerprovidesyouwiththedifferencebetweenthetwovaluesandthelattergivesaratio. Theresultcomesindollarformincostorschedulevariance.Anegativevariancemeanstheprojectisintrouble.However,theprojectisingoodshapeifthevarianceispositive.Theproblemwithvarianceisthatyoucannotcomparethehealthoftheprojectwithanother,evenifyourorganizationhasmanyprojects. Therefore,youusethePerformanceIndexestocomparethehealthofaprojectamongmanyprojects.ThePerformanceIndexistheratiobetweentheparameters,andaglimpseoftheseratioswillhelpyoudeterminethehealthoftheproject.Thismakesiteasierforyoutocomparetherelativehealthofprojects.Youcanfindefficiencythroughindexes. Summary SchedulePerformanceIndexandCostPerformanceIndexhelpyouanalyzetheprogressofaproject.Thesemeasurescanhelpyoudetermineifyouareperforminguptostandard.Youaredoingwelliftheratioishigherthanone.Iftheratioislessthanone,thereisaproblemwiththeproject,andyoushouldtakecorrectiveaction.Inidealconditions,theratioshouldbeone. ThisblogpostisthefourthinaseriesofsevenonEarnedValueManagementandprojectforecasting.Pleasereadthroughmypreviousthreepostsbeforereadingthispostifyou’recomingherefromasearchengineorareferral. Thefollowingarethelinksforotherblogposts: EarnedValueManagementElementsofEarnedValueManagementScheduleVarianceandCostVarianceSchedulePerformanceIndexandCostPerformanceIndex(Youarehere)EstimateatCompletionEstimatetoCompleteToCompletePerformanceIndex Aprojectisbudgetedtocost$6millionandtake12monthsto construct.Thebudgetisevenlydistributedacrosstheprojectlife. Afterfourmonthstheoutgoingis$2.1million,and30%ofthetotal workiscompleted. (1)CalculatetheCVandSVanddeterminehowfaroffschedulethe projectisafter4months. (2)Calculatetheexpectedcompletiontime,SPIandCPI Reply Hi..HowcanideterminetheWIPoftheprojectpermonth??isitbyactualtodatedividedwithtargettodateoractualtodatedividedwithtotaltargetayear?? Reply Belowarefewsituations- 1.Planningwasnotdonecorrectly.Hence,suchdeviation. 2.on2ndMonth,whenPMrealizedthatprojecthasovershotthebudget,teammayhaveappliedtechnciquesuchasFastrackingtoincreasetheearnedvalue. 3.Also,inshortprojectsthatarerunfor3to6months,thesechangesarequitepossible. Reply Ihaveaquestion.ifcpiin2ndmonthis0.7and3rdmonthis0.93.. comparetheCPIforthe2ndand3rdmonth?whythissituationhappen? Reply Cannotanswerthereasonbehinditwithoutreviewingthecompletingsituation. Reply October29,2018Sripostedaninterestingquestion.Itooaminterestedintheanswer/explanation. “AprojectteamwithaCPIof0.78islookingforoptionstoreducecost.WhichofthefollowingwouldbetheBESToptiontodoso? a.Reduceatestcycleinthesystemtestingphase b.Reducescopebycuttingdownnon-essentialfeatures c.Addmoreresourcestoexpeditetheschedule d.Revisitestimatesandeliminaterisksandthenre-estimate” Reply Aspermyunderstanding,thecorrectansweris”Reducescopebycuttingdownnon-essentialfeatures”. Reply IdidnotseearesponsetoSri’squestion,regardinghowtoreducecost.Howdoesonereducecost,iftheprojectisonschedulewithaSPIof1.0,yettheCPIis.923? Reply Whichquestion? Reply whereyourspi=0.99allthetime,goingbyuranalysis,whatshouldudototoensurethatuarenotbehind? Reply 0.99SPIisOkayandacceptable. Reply verygoodexplanation.Thanku Reply YouarewelcomePriya. Reply AprojectteamwithaCPIof0.78islookingforoptionstoreducecost.WhichofthefollowingwouldbetheBESToptiontodoso? a.Reduceatestcycleinthesystemtestingphase b.Reducescopebycuttingdownnon-essentialfeatures c.Addmoreresourcestoexpeditetheschedule d.Revisitestimatesandeliminaterisksandthenre-estimate Reply Icamehereviayetanotherrandominternetsearchinmyquestofaself-imposedmissiontogainabetterunderstandingofEVMconcepts.ThematerialsI’mreadingwerejustnotprovidingthat“lightbulb”momentthatmakestheconceptscometogether.ThisisbyfarthebestsiteI’vediscoveredtodateexplainingearnedvalueinawaythatIGETIT!InowseeEVMasafour-leggedstool:Basics;variances;Indices,andforecastingformulas.Beforeseeingitbrokenapartthisway,myADDwaswreackinghavoconmyunderstandingandtheoverwhelmingfeelingoftryingtocategorizewhatseemedtobepuzzlepiecesnotcomingtogether!Cannotthankyouenoughforthiswork.Now,Icanputsomeanalyticalthoughtagainstrealprogram/projectwork. Reply ThankyouMarieforyourcomment.IamgladthatIcouldbeofsomehelptoyou.Letmeknowifyouneedanyfurtherhelp. Reply ifthespiis1.22,howshouldthemanagerreact? Reply Theprojectmanagershouldinvestigatethecauseofthedeviation. Reply Hi, I’mtryingtofigureouttheSPIwhenthePVis0.Thetaskisn’tscheduledyetandiscompletesoofcourseit’saheadofschedule.TheEVis2000butifthe2000isdividedby0thenwhatistheSPI?Thispartisn’tmakingsensetome. Reply WithzeroPV,youcannotcalculatetheSPI. Reply Hello.Thispostwasreallyfascinating,particularlybecauseIwaslookingforthoughtsonthistopiclastThursday. Reply HelloLauren,IamgladthatIcouldbeofsomehelptoyou. Reply Ihaveaquestion.pleaseresolve YouaretheprojectmanageroftheGHYProject.ThisprojectisscheduledtolastforoneyearandhasaBACof$4,500,000.Youarecurrently45percentcompletewiththisproject,thoughyouaresupposedtobeatyoursecondmilestonewhichaccountsforhalfoftheprojectcompletion.Therehavebeensomeerrorsintheprojectwhichhascausedyoutospend$2,073,654.Whatisthisproject’sscheduleperformanceindex? Reply 0.9 BAC=4,500,000 EV=2,025,000(0.45*BAC) PV=2,250,000(0.50*BAC) SPI=EV/PVi.e.2,025,000/2.250,000=0.9 Projectisbehindschedule Reply SPIisabiasedestimatorofaproject’sscheduleperformance.AbetterunbiasmeasureisCP-SPIwhichyoucanreadabouthere:http://www.projectcynefin.com/blog/better-than-spi-cp-spi Reply ThanksforsharingDon. Reply HowdoyoucalculateCP? Reply Hello Idon’tunderstandhowcanIknowthataprojecthasbeenterminatedearlyusingSPIandCPI? Anexamplefromanexam: Whythecorrectanswerforthequestion:Post-mortemanalysisafterscheduledfinishdateofaprojectshowsaCPIof0.7andSPIof1.44.Whatisaplausibleexplanationforthat? Therightansweris: Theprojectwasterminatedearly.Atthattime,itwasoverbudgetandaheadofschedule. Thanks Reply Thedatashowsyouareaheadofscheduleandoverbudget. Whataretheotheroptions? Reply IfoundanotherquestionfromOliverfreepreparationexam: Youfoundthefollowingearnedvalueanalysisinformationforaprojectthatwasrecentlyclosedout:SPI=0.7,CPI=1.0 A.Theprojecthasbeencancelledwhileitwasexecuted.Atthattimetheprojectwasbehindscheduleandonbudget. B.Theproject’sdeliverablehaveallbeenfinished.Theprojectcameinbehindschedulebutonbudget. C.Theproject’sdeliverablehaveallbeenfinished.Theprojectcameinaheadofschedulebutonbudget. D.Theproject’sdeliverablehaveallbeenfinished.Theprojectcameinonschedulebutoverbudget. CorrectanswerisA.Whyisthat? Reply BecauseyouhaveanSPIvaluebelow“1”whichmeansthattheplannedvalue(PV)hasnotbeenrealizedandthereforetheprojectisnotcomplete. Reply ThiswastheanswerIwaslookingoutfor!!ThankyouJim!! Reply Youfoundthefollowingearnedvalueanalysisinformationforaprojectthatwasrecentlyclosed-out: SPI=0.7,CPI=1.0 Whatistheanswerfromthebelowoptions a.Theprojecthasbeencancelledwhileitwasexecuted.Atthattimetheprojectwasbehindscheduleandonbudget b.Theproject’sdeliverablehaveallbeenfinished.Theprojectcameinbehindschedulebutonbudget. Reply Youarebehindthescheduleandonbudget.Sotheanswer“a”wouldbecorrect. Reply Youcannotbebehindscheduleandonbudget.Youmayhavespentasmuchaswhatwasbudgetedtodate,butnotonbudget,programwise.Projectedouttofinishallplannedtasks,youwillbeoverbudget. Reply OptionB Reply Optiona.behindthescheduleandonbudget Reply B, Reply Quickquestiononthisscenario: ItistheendoftheprojectalreadyandSPIis0.9.Whichisthebestanswer? –Theprojectisbehindtheschedule –Theprojectdidnotcompletealltheactivitiesandisbehindschedule Reply Whatisthedifferencebetweenthesetwo? Reply Itsuggeststheprojectwasterminatedbeforecompletion. AtcompletiontheSPIisalwaysmarkedas1irrespectiveofwhentheworkwascompleted. Reply EVatcompletionshouldbe1.Ifitislessthan1,itmeansthatsomeactivitieswerenotcompleted…sothesecondstatementiscorrect. Reply thesecondone..isthebestfitforthequestion Reply Hi! Willupleasehelpmetosolvethisproblem? Designandplotacriticalratioforacomputerinstallationprojectthathadplannedconstantlinearprogressformotoandearnedvalueof200overa100-dayduration.infactprogressforthe20dayshasbeen:2,3,4,6,7,9,12,14,15,17,20,21,22,24,26,27,29,31,33.whatcanyouconcludeaboutthisproject? Reply EarnedValue=33,PlannedValue=40.SPI=0.825.Soprojectisbehindschedule(SPI<1).Theydonotgiveactualcost,socannotsayanythingaboutCPI. Reply Hiall, Werunningamultiyearprojectinacountrythathasaninflationof5%yearonyear.Wewererequestedtosubmitourbudgetinnominalandrealterms. Isitcorrecttomeasuretheprojectinnominaltermsorrealterms? MylogicsaystocalculatetheCPI,IwouldcalculateEVinnominaltermsusingthenominalbudgetsothatitcanbecomparedagainsttheactual(alsoinnominal). Currentlymyproject’sEVisbeingcalculatedusingtherealtermbudget(2014terms)beingcomparedagainstactualsincurredfrom2014to2016. Yourthoughtsandexperienceinsuchasituationwouldbewelcomed. Reply WhatistheidealvalueofCPI? Reply Itshouldbe1. Reply Dearall KindlyconsiderthefollowingstageoftheprojectofconstWorks CPI=0.66 SPI=0.52 PVasperPRimaverais9.3Bn EVasperPriamaverais8.9Bn Question:1 InordertocalculatetheACoftheprojecttogetacrosscheckiusedCPI=EV/AC butthecostiamgettingACdoesn’tmatchestheactualcost. cananbodypleaseexpedite. Question02 HowtoreconciletheconcernedissuesillustratedinQ1 Regards Reply INMYPROJECTCPIISMORETHAN1.4ANDSPIIS0.8 Reply Thismeansyouarebehindthescheduleandunderbudget. Reply isderanythingwrongwithc.p.i asmyp.msaysthatitshouldnotbelikethis.. Reply Yes,ideallyitshouldbeneartoone.1.4meansyourcostestimationwaswrong. Reply IfCPI>1ansSPI<1atprojectend-doesitmeanprojecthasbeenterminatedinmiddle? Why? Reply IfSPI<1,youarebehindscheduleandworkisnotcompleted.Soyoucansaythattheprojectisterminated. Reply HiFahad. Iwouldlikeyoutoexplainthis. WhatimpactwouldtherebeonPV,AC,EV,CVandSVifthereareearlystartofactivityORlatestartofactivity? Hopeyoucanexplaintheimpacts! Thanks! Reply FromtheinformationgiveninyourquestionIcansaythat: Iftheactivityisoncriticalpath,anditisdelayed,theprojectwilldelay.Howeveritisfinishingearlier,theprojectwillfinishearlier.Alsowatchforotherpathsinyournetwork. Iftheactivityisonnon-criticalpath,itdoesnotmatterifitdelaysuntilallfloatisconsumed.Afterthattheprojectwillstartdelaying. Reply Whichofthefollowingidealattheendofaproject;a.AC=EV.b.EV=PV.c.AC=PV.d.CPI=1 Reply Attheendoftheprojectyouwillearnallplannedvalue,soaspermyunderstandingEV=PVwillbetherightanswer. Reply HiFahad, BeforeyoumakeanyprogressagainsteithertheCPIorSPI,meaningyouhavestartedthatscopeofworkyet,IassumeyoushouldsettheCPIorSPIto1,correct? ie:IfCPI=EV/AC,andEVandAC=0,shouldwesetCPIto1whichforecastseverythinginthatpartofthescopeasonbudget? Reply IfPV=AC=EVmeaningyouareonscheduleandonbudget.IfACiszeromeansyoudidnotspendasinglepennyonit. Reply Hello, IfyouhaveaprojectthatiscompleteandtheCPI=1andtheSPI=237onanexpeditedprojectisthisavalidwaytorepresentthattheprojectcompletedsignificantlyaheadofschedule? Reply AreyousurethatSPI=237? IfSPI=2thismeansyouhavecompletedtheprojectinhalftime. Reply someinformationdidnotappear: IF Bob’sAccount:60%workdoneafter15hours Sue’sAccount:75%workdoneafter25hours Roger’sAccount:10%workdoneafter5hours Mike’sAccount:50%workdoneafter30hours Jill’sAccount:80%workdoneafter15hours Reply Question:Allenismanaginganewproductdevelopmentproject.•Theprojectestimatesincludeatotalof100hoursofdevelopmenttime.•Therearefiveseparatetasksthatwilltake20hourseach.•Eachtaskhas4subtasksthattake5hourstocomplete.•Allenhiresfiveprogrammerswilleachhavetwentypercentoftheworkthatcanbecompletedconcurrently.•Eachprogrammerwillcharge$100perhour.Totalbudgetfortheprojectis$10,000.•Basedonthedistributionofwork,itisdeterminedthattheprojectcanbecompletedwithinoneweek.InitialReports•Attheendoftheweek,theprogrammersturnintimesheets.•Atotalof90hoursisreported. FindCPI,SPI Answer: Budget=$10,000for100hours PV@90Hours=0.9×10000=$9,000 AC=$9,000for90hours EachWorkComponentbudget(considering5workers)=$10,000/5=$2,000 EVforBob’sAccount:0.6×2,000=$1,200 EVforSue’sAccount:0.75×2,000=$1,500 EVforRoger’sAccount:0.1×2,000=$200 EVforMike’sAccount:0.5×2,000=$1,000 EVforJill’sAccount:0.8×2,000=$1,600 TOTALEarnedValue=$5,500(additionofPVofall5workers) SV=EV-PV;i.e.$5500-$9000=$-3,500, SPI=EV/PV;i.e.5500/9000=0.6 Reply Allenismanaginganewproductdevelopmentproject.•Theprojectestimatesincludeatotalof100hoursofdevelopmenttime.•Therearefiveseparatetasksthatwilltake20hourseach.•Eachtaskhas4subtasksthattake5hourstocomplete.•Allenhiresfiveprogrammerswilleachhavetwentypercentoftheworkthatcanbecompletedconcurrently.•Eachprogrammerwillcharge$100perhour.Totalbudgetfortheprojectis$10,000.•Basedonthedistributionofwork,itisdeterminedthattheprojectcanbecompletedwithinoneweek.InitialReports•Attheendoftheweek,theprogrammersturnintimesheets.•Atotalof90hoursisreported. Bobworked15hoursand60%workisdone. Sueworked25hoursand75%workisdone. Rogerworked5hoursand10%workisdone. Mikeworked30hoursand50%workisdone. Jillworkedfor15hoursand80%workisdone. FindCPI,SPI,HealthofProject. Reply HiFahadUsmani, Thanksforyourreply..However,fortheaboveoptions,bothoptions1and2seemstobecorrect. Couldyouplsletmeknowthecorrectanswer. Thanks Reply Ifthecostvarianceispositive,thismeansyouareunderbudget.Option“b”isthebestanswer. Reply 1.. IfCVis1.02,watdoesitmeans? a) Itsinonbudget b) Itswithinbudget c) Itisoverbudget. Reply Readbelowgivenblogpostoncostvarianceandschedulevariance. https://pmstudycircle.com/2012/05/schedule-variance-sv-cost-variance-cv-in-project-cost-management/ Reply hello. whatwecandoifSPI>1?? Whatdoyouproposetodealwiththiscase? thankyou Reply Ifitisconsistentlytoohigh,youwillcheckyourestimate. Reply WhenIlookattheformulasandtheexamples,itseemstoassumethatcostsarespreadevenlythroughouttheproject(eg.3consultantsworkingfromstarttofinishoftheproject). butinfactmostprojectshavecostsvaryingfrommonthtomonth.eg.theremaybepurchaseofsoftwareorequipmentthatspikescostsincertainmonths. wouldthesesituationsbeaccuratelycoveredbyEV,PVCPIetc? Reply InthatyouwillseeyourscheduletofindthevalueofPV,youhavetheAC,andyoucanfindtheEV.Onceyougetthesefigure,youcanrunyouranalysis. Reply IsitpossibleforaprojecttohaveSPI>1andCPI>1(assumingascenariowheretheprojectprogressisslow,andtheprojectisalreadyrunningoverbudget)?Whatarethemitigationmeasures? Reply Itispossible.Forthemitigationplan,youneedtofindthecausesfirstandthenyouwillbeabletocorrectit. Reply HiFahad; Greatpost.I’vereaditandwillbereadingtherestofthemaswell. Youstatethat“AconsistentlyhighorlowvalueofSPIorCPIisanindicationthatsomethingiswrongwithyourplanningand/orcostestimates.Inthiscase,checkallassumptionsandestimatesfortheircorrectnessandtakecorrectiveactionifneeded.” Iagreewithyourstatement.Iwaswonderingifyoucansuggestwhatyouwouldconsider“high”.OneofourcontractorsisclaimingaCPIof1.88.Tomethisisveryhighandunreasonable.I’mjustwonderingwhatyourthoughtsonthesubjectare? Reply Ideallyitshouldbeneartoone,butaround1.1canbeacceptableandcanbebringundercontrol. Nodoubt1.88istoolhigh. Whatishighorlow,itissubjectivediscussionhoweverasyoumoveupwardthingsstartedgettingworse. Reply PerformanceIndexMethod ThesearetheindexesIpullfromoneofourprojects: CPI/SPI/CSI 11.16/0.87/9.73 So,itmeansthatweareunder-budgetandbehindtheschedule,correct? Reply Yes. Reply HiFahad, Iamgoingbananastryingtosolvethisproblem—IthinkIamover-complicatingit.Canyoupleaseadvise? IfIhave4taskswithseveral%completionsandsomeACandPVdatacanIusethosetocalculateboththeSPIandCPI? A:100%complete.AC=3000,PV=2500 B:100%complete.AC=4000,PV=3000 C:85%complete.PV=6000 D:55%complete.PV=2000 Thanksforyourhelp, Cesar Reply DearFarhad, Thanksforyourblogs.IhavejuststartedreadingPMPmaterial&thisisreallywellexplained. Butiamcompletelyconfusedwiththiseg.,couldbeasiamjustunderstandingconcepts.Intherealworldthisscenariodoesn’tseemtobepossible,atthesametimeitalsoraisesaquestionforme. Ifitrytomakethisreal,asaneg.ihavetoconsiderEV&CVas20000andPVas80000.Thismeansthatihadconsidered80%completionofworkwhenactuallyonly20%hasbeencompleted.ThisisreallybadbutwesaythathavingCPI>1meansweareonschedule.Aren’tthese2scenariouscompletelycontradictory.HerewearesayingthatCostspentisasperexpectationbutprojectionwhichhasbeendone(PV)iscompletelywrong.ThushowcanCPIjustifyperfectnessofprojectscheduleorevenmeanthatcostisbeingspentasexpected. Pleaseguide!! ThanksandRegards, Reshma Reply Thereisadifferencebetweenrealworldsituationandvirtualdata.Whilemakingaquestion,youmayselectanyvirtualdatatochecktheanalyticskillofacandidate.Youshouldnotworryaboutit. Reply WhatdoesitmeanifCPIismorethanSPI? Reply Youshouldcompareappletoapple. Reply Whatdoesmeanbyappletoapple Reply SPIshowsthescheduleperformanceandCPIshowsthecostperformance.YoucannotcomparetheSPIwithCPI. Reply Dearsir, thanksforthisnicearticle. couldyoupleasetellmehowthePViscalculatedifprojectisdelayed?AswecalculateaspertheinitialdatesthenPVexceedsthebudget.OrdoweneedtomakeanewbaselineandthencalculatethePVwithrespecttodelayeddate? thanks, vpt. Reply YouwillcalculatethePVbasedonthecurrentschedule.Ifyouarebehindtheschedule,cannotrecoverit,youmustchangetheschedulebaseline. Reply Thanksforsharingknowledgehere…ijuststartedhere..shortlywewilldiscussalot. regards Reply YouarewelcomeAnwar. Reply HiFahad– Quickquestion.SPIisEV/PV;whataboutwhenchangeordersareaddedandyourPVsuddenlychanges?SomeoftheCO’saddedarealreadycompletebythetimetheyareaddedintotheschedule;othertimes,theplanneddatesforchangeordersneedtobeadjusted,otherwisetheSPIdoesnotseemtocalculateproperly.Anythoughtsonthis? Thanks, Lisa Reply Onceanychangerequestisapproved,baselineswillbeupdated,andyouwillcalculatethePVasperthecurrentsituation. Reply IhaveaprojectwheretheCPIis0.74&SPIis0.98.HoweverthetrackedMSPscheduleshowsavariance(delay)of45days. Cananybodycommentwhat’swrongorwhatisthesituationofprojectbasedonthis.Theprojectdurationis1500days&365dayshavepassed. Raghu Reply DearFahad, Thanksforyourreply. Actually,IwanttoaskthathowtorelateSPIwithprojecttimeduration? Forexample,ifSPIis0.66,ittellsus,wearebehindschedulebutquestionisthishowmuchbehindintermsofprojecttime? If,Idevideprojecttimedurationwhichis9monthsbySPIwhichis0.66thenestimatedprojecttimedurationwouldbe13.6months.Isthisapproachrightorwrong? Reply Youcancompareyouractualprogresswiththeplannedprogress(schedulebaseline).Thiscomparisonwillshowyouthathowmuchyouarelagging. Reply DearFahad, Hereisanexample; BAC=90millions ProjectTime=9months Afteronemonth; EV=10%(i-e9millions) AC=10millions& PV=13.5millions Aftercalculation; CPI=0.90(itmeansprojectisoverbudget)&EAC=100millions SPI=0.66(itmeansprojectisbehindschedule)&EAC=136millions Now,myquestionisthathowshouldIrelateCPI&SPIwithtimedurationofproject(i-e9months)? If,IdevidetimedurationofprojectbySPI,ittellsusestimatedtimedurationoftheprojectis13.6monthsandinthiscaseestimatedcostwouldbe136millions. Ismyapproachisrightorwrong? IfNo,pleaseexplainrightapproach,ifYes,then, CanIalsouseCPItocalculateestimatedtimedurationoftheproject?Andinthiscaseestimatedcostwouldberelativecost? Reply Youdon’thavetorelateCPIwithSPI. Thesetwoaredifferentparameters.CPItellsyouaboutyourcostperformanceandSPItellsyouaboutscheduleperformance. Reply DearFahad, Thankyouverymuchforyourresponse. ItsOK,butmyquestionwashowtorelatespeciallySPIwithtimeduration? Forexample,SPIis0.66,itmeansthatwearebehindschedule,buthowmuchwearebehindintermsoftimeduration? TheapproachIadoptedisrightorwrong?i-edevideprojecttimeduration(9months)bySPI(0.66)andtheestimatedprojecttimedurationwouldbe13.6months. Reply Helloandcongratulationsforyourblog.HowtocalculatetheSPIwhenanactivitystartbeforeschedule?Itriedandicantcalculateitbecausethelowerpartofthefraction(plannedvalue)equalstozero.Thanksinadvance. Reply Youneedtoreviewtheyouschedulefirst. TocalculatetheSPIyoushouldhaveEVandPVonhand. Reply IhavealreadycalculatedEVandPV,butforexampleEV=5000andPV=0becausethetaskhasbegunaheadofschedule.Thenit’simpossibletocalculateSPIforthiscondition. Reply Yes. Reply Incaseyouareaheadschedule,whywouldyoucalculateSPI..Youshouldpartytillnextmilestonearrives.:) Reply Ifthedifferenceissmall,itisokayotherwiseyoumustfindthecauseforit. Reply WhycanweuseCPItocorrectlyforecastEAC,butcannotuseSPItocorrectlyforecastscheduleatcompletion? Reply ThereisanothertermcalledTocompletescheduleperformanceindex.Idon’tunderstandthatwhythePMIhasnotincludeditinthePMBOKGuide. Reply anotherquestionplease: IncalculatingEViuse%completeintermsofquantity,ex.wehaveaplannedquantityof1000cubicmetersofreinforcedconcretetobefinishedin8monthswithBACof6000000,astodatewecompleted100cubicmeterssotheEV=0.1(100/1000)*BAC isthisrightandaccurate? Regards Reply Letususethesimplemathematics. Thecostof1000cubicmeterconcretingis6,000,000USD. Thismeanscostof1cubicmeterconcretingwillbe=6,000,000/1000 =6,000USD Therefore,thecostof100cubicmeterconcreting=100*6,000 =600,000USD Hopeithelps. Reply Hi, WhencalculatingSPI,youcalculatedPVas%complete*BAC(50%intheexampleassixmonthshaspassedfromaoneyeardurationproject),butisn`tthiswaymaybedeceivingsometimes?asitassumesthatthebudgetisdividedequallyalongthemonthsoftheprojectduration.WoulditbemoreaccuratetogettheactualplannedamounttodateanduseitasthePV? Regards Reply Iftheconceptisclear,youcannotbedeceived.Itookthesimplestexampletomakeconceptclear. Reply Hellosircanyouhelpmeinsolvingoneproblem ThereaprojectAwhichistobecompletedin20daysbutitgetscompletedin10days. AndPlannedvalue=Actualcost WhatwillbetheCPI&SPIoftheprojectandhow? Reply Sincetheprojectiscompleted,thismeansSPI=1 SPI=EV/PV 1=EV/PV EV=PV NowCPI=EV/AC Accordingtothequestion,AC=PV AndPV=EV Thismeans, CPI=EV/EV =1 HenceSPIandCPIbothwillbeequalto1. Hopeithelps. Reply Yessiritreallyhelped Thanksalot!!! ButsircanSPI&CPIbe2ormoreorcanitbenegative? AndsirwhatwillbetheCPI&SPItothesameproblem Ifthesameactivitywastobecompletedin20daysbutitgotcompletedin140days Reply SPIandCPIdependsonEV,PVandAC.Theseareratiosandcannotbenegative. Regardingyournextdoubt,youcananalyseitwithsamelogic. Reply Thankyousir…butcalelaboratealittle… CanSPIbe2? Andforthesecondquestion IsSPI=20/140=0.14 Acctothelogic? Reply Thelogicsays,SPI=EV/PV Mathematicallyyoucancomewithanynumberandgettheresult. Reply Hello, DoyouthinkCPIandSPIwouldhelpdeterminewhethertheprojectisbehindoraheadofschedule? K.S. Reply Yes,SchedulePerformanceIndex(SPI)helpsyoudeterminewhethertheprojectisbehindoraheadofschedule. Reply sirFahadUsmanisbwouldyouliketosendmeprimaverap6notes? Reply Iwillsearchforit,willsendyouifIgetsomething. Reply Hello,doyouhaveCPIandSPIbenchmarksrecognizedinternationally?AnddoYouhavetheminthéhi-techRDbusinesses? Regardsandthanks Pierre Reply Generalunderstandingsaysthatitshouldrevolvearound1.Someorganizationsarecomfortablewith0.9to1.1andothersarenot. Itisuptoyourorganizationtodecidethebenchmarkforthemdependingontheirrisktolerance. Reply GreatexplanationFahad! OnequestionIhave.. IfSPIislessthan1..say0.6…ofcourseitmeanswearebehindtheschedule..doesitalwaysmeanthatdeliverablehavenotbeenmet? Canitbepossiblethatprojectiscompletewithalldeliverableacceptedbycustomer..butSPIisstill0.6? Thanks Reply Deliverablecanbemeteveniftheprojectisbehindschedule. Itisnotpossibletocompletetheprojectandspiisstill0.6becauseoncetheprojectiscomplete,noworkleftandspi=1. Reply ThanksFahad! Reply HowisthatpossibleFahad–Deliverablesaremet,buttheprojectisbehindschedule?Canyouelaborate? Reply Supposeyouareworkingamulti-yearproject,andyouhavetodeliversomedeliverablesatsomeintervals. Andifyoudeliverafewofthesedeliverableslate,youwillsaythatalthoughthedeliverablesaremetbuttheprojectisbehindschedule. Reply Stillcouldnotgetit.LetusasayProjectXhas3deliverables–D1,D2andD3.D1willbeonDay15,D2willbeDay30andD3onDay45. IfIamsayingon45thDaythatD3willbedeliveredonDay50,then–Projectisbehindschedule.Butarethedeliverablesmet?No.ThensayingthatD3ismet–isnotitwrong? Insuchacase–yes,D1andD2aremetandSPIwillbe1forthem,butwillbeD3beofSPI=1?AndmoreimportantlywillprojectbeatSPI=1?No.AsCumulativeSPIwillpullitbelow1. OramIunderstandingdifferently? Reply Yes,you’reright. InthiscaseyouwereproceedingincorrectdirectionuntilyoudeliverD2,however,afterdeliveringityoudeviateandthescheduleisdelayed. Reply ThanksFahad. Thecorrectwordingswouldbe–ProjectcanbedelayedandSPIcan&willbebelow1,howeversomedeliverablescanbemet,butNOTall.Whenireadfirsttime,itfeltlike“Projectcanbedelayed,butdeliverablesaremet–meaningall”,whichisnotthecase. Btw,whatwillbeyoutakeonCPIinsuchacaseforD1,D2,D3andthecompleteProjectaftertheprojectisdelivered(i.e.,delayedanddelivered)?Willitbe1forallordifferent? Reply RegardingCPI,youneedtoseehowmuchyouhaveearnedandhowmuchhasbeenspent. Reply HiUsmani, Ijusthaveonequestion. WhetherthetasktypeofeachtaskhaveimpactonSPI,CPIandotherEVMMetrics?. forexample,willthefixeddurationtasksimpactonSPIandCPIdifferfromtheSPIandCPIvaluesforfixedunitsandfixedwork?ifso,how? Reply Ididnotunderstandwhatyouwanttoask?.Canyoujustclarifyitagain… Reply Imean, Doesthetasktypes(fixedduration,fixedworkandfixedunits)playshandindeterminingtheCPIandSPIvalues? Reply onthestartoftheprojectthesewillallowyoutodetermineyourbaseline.allyourworkiscomparedtothebaseline. Reply Hi, Justaquestion:IfyouhavebothPV,EVandACfor6tasks,howtocalculatetheSPIfortheworkpackage/6tasks/? Reply SPI=SchedulePerformanceIndex. Asthenamesuggests,SPIiscalculatedfortheschedulenotforanyindividualactivities,taskortheworkpackage. Inyourcase,youwillrollallactivitiesupandthencalculatetheSPI. TheseinformationareusedinPerformanceReporttoshowtheprogressand/orforecastfortheprojecttothemanagement.Managementwanttoseethewholepictureatbroadlevel,theywouldn’tbeinterestedinseeingthestatusofthousandsofactivitiesorhundredsofworkpackages. Reply thekeytocalculatespi/cpiatworkpackagelevelistoknowthepercentagecompletionofworkpackage.forexample–plannedeffortsareasfollowsforeachworkitem–requirementgathering=40hrs,design=100hrs.BuildandTest=200hrs.%completionofeachworkitem,requirementgathering=100%,design=40%,buildandtest=20%.So,workpackagecompletioncanbecalculatedas–(40*1+100*0.4+200*0.2)/(40+100+200)=120/340=6/17=~30%. onceyouknowthepercentagecompletionatpackagelevel,youcancalculatespi/cpiatpackagelevelbysummingupeffortsofeachitemsandconsideringearlieststartdateandlatestfinishdateoftheproject/package. Reply WellsaidAlam. Reply Yousayinyourexplanationthattheperformanceindexvalueliesbetween0and1.However,theCPIandSPIvaluescanexceed1intheprojectisdoingwell. Reply Thatwasanerror–Corrected. Thanksforpointingitout. Reply Hi canyouhelpmeatthisExercisesforcodsource Assumed:Ihavea8taskand50day myteachersaystudentmustDesigngantchartWithc#and3inputtextfile? yourSincerely.Majid Reply SorryMajid,I’venoideaaboutit. Reply Ihavespiandcpi 1-thenmyteachersaywhy[spiandcpi]isbad?(orwhycpi,spibadindicator?) 2-andwhatapproachforAlternative[cpi,spi]? Thanks Reply SPIandCPIarejustanindicatorthatinwhichdirectionyourprojectisleading.CPIandSPIaregoodorbad,itdependsinconditionofyourproject. Reply hi canusay,whataretheyisgoodorexcelent? fromcpiorspi? ifuranswernoexellentruhaveaapproachforthis? Reply HelloMajid, Ididnotgetyourquestioncorrectly,canyoujustexplainitagain. Reply Inthisblogusaidthatforeveryrupeevrearning.67but,ifcpi<1doesnttharmeanwearerunningoverbudjetandwedonthaveenoughmoney? Reply Itmeansweareoverbudgetandifnocorrectiveactionistakenthenfundsmayfinishsoon. Reply Thanksalot Reply whencalculatingtheCPIandSPIvalues,dowehavetomultiplyitby100%togetapercentagevalue? Reply No,youdonotneedtomultiplyitbyanynumber. Reply Sanjiv,theseareratios,notpercentages. Reply hellosir,canyoupleasesolveoutaproblem.ihavegivenaprojectanddetailsoftheprojectare…. Yourcompanyisdoingwellandhasaprofitofabout$25,000thatyouneedtoinvest.Themoneyiscurrentlyinasavingsaccountearninganinterestof5%perannumandisguaranteedforthenext5years. Youwanttomakeyourprofitworkhardersoyouhavelookedatsomeinvestmentopportunitiesavailable.Theyare •Toinsulatethecurrentcompanyofficesatacostof$10,000whichwillprovideafuelsavingsof$1,500peryearoverthenext10years. •Topaythelumpsumof$15,000tothemortgageof$50,000thathasaloantermof10yearsat7%interestperannum. •Toinvest$15,000intoanewbusiness,whichhasbeenestimatedtoreturndoubletheamountin5years’time. (a)Giventheprofityouhaveandassumingadiscountrateof5%,performanddocumentappropriateNPVcalculationsforallpossibleinvestmentoptionsyouidentified.YoucanworkoutyourcalculationsusingMicrosoftExcel.Ensureyou [8marks] (b)Fromyourcalculationsin(a),whichinvestmentwouldyoutakeupandwhy? [2mark] Question2(10marks) Youarebuildinganewofficeforyourcompany.Aftersomediscussionwithyourbuilder,youidentifiedsomeofthekeytasks,thedurationandthecoststocompletethebuild.AsyouareaprojectmanageryouhavedecidedtomonitortheprogressoftheirbuildusingEarnedValueManagement(EVN).Answerthefollowingquestionsusingthefollowinginformation ID TaskName Cost($) StartDate Duration 1 Layfoundations 40,000 April1,2013 2weeks 2 Buildframe 27,000 April2013 4weeks 3 Installpipesandelectrical 20,000 May2013 6weeks 4 Makehousewater-tight 50,000 July2013 8weeks 5 Installinternalwallsandbathroom 25,000 September2013 12weeks 6 Installcabinetries 10,000 December2013 4weeks 7 Painthouse 6,000 January2014 2weeks 8 Installlightfixturesandappliances 3,000 January2014 2weeks NOTE:Assumethatnotaskisscheduledtorunconcurrently,e.g.,Task2startsafterTask1completes,Task3startsonlywhenTask2completes,andsoon.Also,assumethateachmonthismadeupofexactlyfourweeks. (a)Whatistheplannedvalueoftheentireproject? [1mark] (b)Theprojectmanagerhasmanagedtokeepcosttowhatwasoriginallybudgetedabove.Atthispoint,theprojecthascompletedTask4.Uptothispoint, i.Whatistheplannedvalueoftheproject? ii.Whatistheactualcost(AC)oftheproject?Brieflyexplainhowyouderivetheactualcost. iii.Whatistherateofperformance(RP)foreachtask?UsingtheRPsobtained,calculatetheearnedvalue(EV),schedulevariance(SV),CostPerformanceIndex(CPI),andSchedulePerformanceIndex(SPI)oftheproject. [1+1+1marks] (c)Unfortunately,twotradesresignedafterTask5wascompletedandthiscausedtheremainingtaskstoexceeditsoriginalcostandscheduleby25%,50%,50%respectively.Attheendtheproject, i.WhataretheCPIandSPI? ii.Howistheperformancewithrespecttocostandtime? iii.Ifthecostandscheduleoftheremainingtasksdidnotslip,howwouldtheprojectperform(intermsofcostandtime)? [2+2+2marks] Reply HiFahad, thisisaquestionfromanassignment,sopleaseignoreitandperhapsdeletethequestion/posting. Rashmita,Isuggestyoudosomestudyasthisisontheexam. Regards Jason Reply HAHAHAHAHAIcan’tbelieveit;someoneactuallypostedthishere. I’minSIT764too. Reply cantstoplaughing.Itisablogthatanswersquestionsthough.SoIdontneedtosolvemyassignment.Pleasesolveyourschoolassignmentafterall. Reply youhaveyourbudget.createaschedule.makeWBSforeacharea&resourceload.baselinetheschedule.youcannotgetanycalculationotherthanoneifyourperformanceis0.ifyoudonothing,youcannotcompare. alloftheareascanbeseparatedfortheanalysis,andaggregate. Reply Ican’tbelievethatyouevenpastedthemarksofthequestions.LOL Reply HowwouldyouexplainasituationinwhichtheCPIisgreaterthan1buttheSPIislessthan1? Reply IfCPIisgreaterthanone,itmeansthatyou’reunderbudget.IfSPIislessthanone,itmeansyou’rebehindtheschedule. Theseparametersaresimpletellingyouthat;although,youarespendinglessmoneytocompletetheworkbutyouaremovingveryslowly.Youmustspeedupactivitiestocoverupthescheduledelay. Reply thePMisspendinglessorisconstrainedtospendandasaresulttheprojectismovingslowly. Reply Movingslow?Youmeanbehindtheschedule? Reply Hi!IfyouhaveaCPI=1andaSPI=0,2,wouldyouthenexpecttheprojecttobeover-budgetbytheend?Let'ssaytheyshouldhavefinishedbyyearend,butinsteadtheydeclearetofinishaboutMaynextyear. Also,therewillbenoreductioninresourcesontheway. Itseemstome,thereisacontradictionbetweenhavingavSPI<1andaCPI=1,aslongastheprojectisstillongoingforsometime,andamountofresourcesisnotreduced… Reply HelloSitara!Thanksforvisitingmyblog. AsyousaidiftheCPI=1andSPI=0.2,IwouldsaythatthisconditionisreallybadorIshouldsaythattheprojectisinworstshapeandsomethingterriblywrongwiththeschedule.Inthiscasetheprojectmanagerwillreviewtheprojectscheduleandthenetworkdiagram.Theremustbesomemistakeswithitotherwisetheconditionyoumentionedisrare. LetussaythatthescheduleisOK,thentheprojectmanagerhastwooptionstocompletetheproject,eitherbyfasttrackingorbycrashing.Ifhecanmanagetocompletetheprojectbyfasttrackingthenhewouldnotbeneedinganyextramoneyotherwiseafreshcostestimationwillberequired. Reply HiFahad.Gooddiscussion.Inthiscase,weseethebudgetisexhausted.Sohowcouldwesayfasttracking/crashingwillnotrequireadditionalmoneyisinbothcasesadditionalresourceswillberequiredtocompletethejob. Thanks Ram Reply SincetheCPIis1,theprojectbudgetisnotexhausted. Reply HiFahad, WithCPI=1andSPI=0.2,thisindicateseitherthescheduleisnotresourceloadedforCPIcalculationsortheactivitiesprogressareexaggerated. MainlybecausetheSPIindicatestheprojectwouldbeextended3.2xtheoriginalduration,hencethebudgetshouldhavebeenaffectedobviouslyandtheCPIshouldalreadybeenreflectingthat. Reply Wellsaid. Reply {"email":"Emailaddressinvalid","url":"Websiteaddressinvalid","required":"Requiredfieldmissing"} RecommendedResourcesUsetheseresourcesforyourPMPcertificationexampreparationandpasstheexamwithminimaleffort. ThePMPTrainingProgram ThePMIapproved35contacthourstrainingprogramthatis100%online,affordable,andhelpyoupreparethePMPexam. 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