Back to Earned Value Management (EVM)

To-Complete Performance Index (TCPI)

5 minutes 5 Questions

The To-Complete Performance Index (TCPI) is a forecasting tool in Earned Value Management (EVM) that indicates the performance efficiency required to complete the remaining work within a specified budget. It is calculated by dividing the remaining work (measured in terms of budget) by the remaining funds. There are two formulas depending on the budget baseline used: TCPI = (Budget at Completion (BAC) - Earned Value (EV)) / (Budget at Completion (BAC) - Actual Cost (AC)) or TCPI = (BAC - EV) / (Estimate at Completion (EAC) - AC). The TCPI helps project managers understand the level of performance required from now until the end of the project to meet a financial target. A TCPI value greater than 1 indicates that the project team must perform more efficiently than they have to date, which may be challenging. A value less than 1 suggests that the required efficiency is less than the historical performance, indicating a more achievable target. By analyzing the TCPI, project managers can assess whether the remaining budget is sufficient given the project's current performance trends. It aids in making strategic decisions about resource allocation, cost control measures, and necessary adjustments to the project plan. The TCPI also helps in evaluating the reasonableness of the Estimate at Completion (EAC) and supports discussions with stakeholders regarding project funding and expectations. Understanding the TCPI is critical for maintaining realistic expectations of project performance. It serves as an early warning signal when the required performance levels are unattainable, allowing for timely interventions. Furthermore, the TCPI promotes proactive management by encouraging regular assessments of cost performance and remaining work requirements. Integrating the TCPI with other EVM metrics provides a holistic view of the project's financial health and performance efficiency, enabling better forecasting and improved decision-making throughout the project lifecycle.

Test mode:
Start practice test
PMI-SP - Earned Value Management (EVM) Example Questions

Test your knowledge of Amazon Simple Storage Service (S3)

Question 1

When should a project manager use the To-Complete Performance Index (TCPI)?

Correct Answer: When assessing efficiency needed to meet remaining project cost goals

TCPI (To-Complete Performance Index) is specifically used to measure the cost efficiency that must be achieved on remaining work to meet a specified project goal, such as the BAC (Budget at Completion) or EAC (Estimate at Completion). This index helps project managers understand the performance rate needed for the remaining work to stay within budgetary constraints. It answers the question: 'How efficiently must we work to meet our cost goals?' The other options are incorrect because: - Evaluating team member performance metrics relates to resource performance measurement, not TCPI - Calculating final estimated budget variance is related to EAC and VAC calculations - Measuring past performance for schedule trends relates to Schedule Performance Index (SPI), not TCPI

Question 2

A project is showing a TCPI value of 1.2. What does this indicate about the project's future cost performance requirements?

Correct Answer: The project team needs to improve efficiency by 20% to meet the BAC

TCPI (To-Complete Performance Index) of 1.2 indicates that the project needs to improve its cost efficiency by 20% to meet the Budget at Completion (BAC). A TCPI value greater than 1 shows that the project must perform better than its current performance to meet its cost objectives. Specifically, 1.2 means a 20% improvement in cost efficiency is needed. Other answers are incorrect because: - Simply reducing spending by 12% doesn't address the efficiency requirements - The value doesn't indicate already achieved performance, but rather future required performance - Increasing resource allocation doesn't necessarily address the efficiency requirements and misinterprets the TCPI metric

Question 3

A project manager needs to evaluate the performance required to achieve the project's cost objectives. Which formula should be used to calculate TCPI based on the budget at completion (BAC)?

Correct Answer: TCPI = (BAC - EV)/(BAC - AC)

To calculate TCPI (To Complete Performance Index) based on BAC (Budget at Completion), the correct formula is TCPI = (BAC - EV)/(BAC - AC) This formula shows: - What remains to be earned (BAC - EV) - Divided by what remains to be spent (BAC - AC) This calculation indicates the cost performance that must be achieved on the remaining work to meet the BAC. The other formulas are incorrect because: - Using EAC changes the baseline from BAC to EAC, which does not align with the question's requirement - Using PV in place of EV or AC changes the performance measurement basis - Using EAC - EV in the numerator does not properly represent the remaining work to be completed

Go Premium

PMI Scheduling Professional Preparation Package (2024)

  • 3429 Superior-grade PMI Scheduling Professional practice questions.
  • Accelerated Mastery: Deep dive into critical topics to fast-track your mastery.
  • Unlock Effortless PMI-SP preparation: 5 full exams.
  • 100% Satisfaction Guaranteed: Full refund with no questions if unsatisfied.
  • Bonus: If you upgrade now you get upgraded access to all courses
  • Risk-Free Decision: Start with a 7-day free trial - get premium features at no cost!
More To-Complete Performance Index (TCPI) questions
24 questions (total)
Start 24 question test