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Schedule Performance Index (SPI)

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The Schedule Performance Index (SPI) is a measure of schedule efficiency, expressed as a ratio of earned value to planned value. If a project's SPI is less than 1.0, it means the project is behind schedule. Conversely, an SPI of greater than 1.0 indicates the project is ahead of schedule. The SPI focuses on the efficiency of the time utilization on the project, enabling project managers to better manage their schedules and providing valuable guidance on whether there may be a need to adjust resources, or priorities.

Guide to Schedule Performance Index (SPI)

Definition: The Schedule Performance Index (SPI) is an index that measures the efficiency of time utilization in a project. It is part of the Earned Value Management (EVM) methodology and represents the ratio of earned value (EV) to planned value (PV). An SPI of less than 1.0 indicates the project is behind its schedule, and greater than 1.0 indicates it is ahead.

Importance: Monitoring SPI is essential for project managers to assess schedule performance, track progress, and forecast future performance. An SPI less than 1 indicates a need for corrective action.

Working: SPI is calculated as EV divided by PV. For example, if a project has an EV of $80,000 and a PV of $100,000, the SPI would be 0.8, indicating the project is behind schedule.

Exam Tips:
1. Understand the formula and meaning of SPI.
2. Remember that SPI less than 1 means the project is behind schedule. An SPI more than 1 means the project is ahead of schedule.
3. Practice interpreting SPI values in various scenario questions.
Answering Exam Questions:
When answering SPI related questions, remember to:
1. Carefully read the question, noting all values given.
2. Apply the right formula – EV / PV.
3. Interpret the resultant value correctly, i.e., less than 1 is behind schedule and greater than 1 is ahead.
4. In situational-based questions, use the SPI value to determine if corrective action is required and suggest appropriate strategies.

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CAPM - Earned Value Management Example Questions

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Question 1

A tech company has an EV of $18,000, AC of $15,000, and PV of $22,000 in its big data project. The SPI is less than one. What if the company finishes its project today, a week earlier than planned?

Correct Answer: The SPI will increase

The Schedule Performance Index (SPI) is a measure of the efficiency of time utilization on the project. It is calculated as the ratio of the Earned Value (EV) to the Planned Value (PV). If a project is finished earlier than planned, it means that the work was performed more efficiently than initially expected, which would increase the SPI. Thus, the correct answer is 'The SPI will increase'. The other answers are incorrect because: 'The SPI will decrease' is wrong as the SPI increases if the project is finished earlier than planned, 'The SPI will remain the same' is incorrect because the SPI changes depending on the comparison between EV and PV, and 'Not enough information to determine' is wrong as the data is sufficient to determine the impact on the SPI.

Question 2

A company is completing an energy efficiency project. The EV is $10,000, PV is $8,000, and AC is $9,000. However, the energy savings are less than predicted. How might they improve the SPI?

Correct Answer: Revise the schedule to improve efficiency

To improve the Schedule Performance Index (SPI), the company can revise the schedule to improve efficiency, which is answer choice 155818. SPI is calculated by dividing the Earned Value (EV) by the Planned Value (PV). In this scenario, increasing the Actual Cost (AC), answer choice 155819, will not improve SPI as AC doesn't figure into SPI calculation. Reducing the Earned Value (EV), answer choice 155820, would actually decrease SPI, because this value being lower means less actual work was completed than planned. Finally, decreasing the Planned Value (PV), answer choice 155821, would artificially inflate the SPI and not necessarily improve the project's efficiency or performance. Therefore, the most viable and ethical option to improve the project's SPI would be to revise the schedule to increase efficiency.

Question 3

In the middle of an e-commerce project, the SPI dipped from 1.2 to 0.9. What should be the project manager's main attention area?

Correct Answer: The project manager should focus on the project schedule specifically.

The Schedule Performance Index (SPI) is a measure of the efficiency of time utilization on the project. It's the ratio of earned value (EV) to planned value (PV). An SPI less than 1.0 indicates a less than desirable condition in terms of schedule performance. A decrease in SPI from 1.2 to 0.9 indicates schedule slippage, so the project isn't progressing as planned time-wise. Hence, the project manager should focus on the project schedule specifically to bring things back on track. The other options are incorrect because they aren't directly related to a decrease in SPI. Focusing on cutting costs (option 2) would be a response to a cost performance issue or a decrease in the Cost Performance Index (CPI), not SPIReevaluating the project team (option 3) might be beneficial in certain situations, but it's not the most direct response to a lower SPI. Requesting a project deadline extension (option 4) can be a result of an extended schedule, but it is more of a remedial action rather than something that resolves the underlying issue affecting the SPI.

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