Back to Reporting Schedule Status to Stakeholders

Variance Analysis in Schedule Reporting

5 minutes 5 Questions

Variance Analysis is a critical concept in reporting schedule status to stakeholders. It involves comparing the planned project schedule with the actual progress to identify any deviations. This analysis helps project managers understand where the project stands concerning time, enabling them to pinpoint areas that are ahead or behind schedule. In practice, Variance Analysis examines metrics such as Schedule Variance (SV) and Schedule Performance Index (SPI). Schedule Variance is calculated by subtracting the Planned Value (PV) from the Earned Value (EV), indicating whether the project is ahead (positive SV) or behind (negative SV) schedule. The Schedule Performance Index, calculated by dividing EV by PV, provides a ratio that reflects the efficiency of time utilized in the project. For stakeholders, understanding the variances in the project schedule is crucial for several reasons. It allows them to assess the project's health, understand the impact of delays, and make informed decisions regarding resource allocation or strategic changes. Communicating these variances transparently fosters trust and keeps stakeholders engaged in addressing any schedule challenges. In the PMI Scheduling Professional course, mastering Variance Analysis equips professionals with the ability to analyze complex schedule data and translate it into actionable insights. It also involves being adept at using project management software tools that can compute these variances and generate reports accordingly. Effective reporting of Variance Analysis involves not just presenting the numerical data but also explaining the underlying causes of variances. It requires communication skills to convey technical details in a way that stakeholders can understand. Additionally, proposing corrective actions or schedule recovery plans demonstrates proactive management and reassures stakeholders that the project team is addressing any issues. In conclusion, Variance Analysis in Schedule Reporting is an essential practice for keeping stakeholders informed about the project's progress relative to the planned schedule. It provides a factual basis for discussions on project performance and helps in driving decisions that can bring the project back on track if needed.

Test mode:
Start practice test
PMI-SP - Reporting Schedule Status to Stakeholders Example Questions

Test your knowledge of Amazon Simple Storage Service (S3)

Question 1

In your schedule variance analysis report, you identify that several activities have a negative schedule variance (SV) of -40 hours while showing a positive cost variance (CV) of +$5000. What is the most likely interpretation of this situation?

Correct Answer: The activities are behind schedule but spending less than planned

In earned value management, schedule variance (SV) and cost variance (CV) tell us different aspects of project performance: Negative SV (-40 hours) indicates the project is behind schedule, as less work has been completed than planned. Positive CV (+$5000) indicates the project is spending less money than planned for the work completed. Combining these two metrics reveals that while the activities are taking longer than planned (behind schedule), they are being completed at a lower cost than budgeted. This could occur when using less expensive resources or having better cost efficiency despite the delays. The other options are incorrect because: - Activities cannot be progressing faster with negative SV - Resource productivity issues would typically result in negative CV - Schedule delays causing additional costs would result in negative CV, not positive

Question 2

During schedule variance analysis, you notice that Activity X has a Schedule Performance Index (SPI) of 1.25 and Activity Y has an SPI of 0.80. What does this indicate about the project's schedule performance?

Correct Answer: Activity X is 25% ahead of schedule, while Activity Y is 20% behind schedule

Schedule Performance Index (SPI) is a measure that compares earned value to planned value, indicating schedule performance. When SPI > 1, work is being completed faster than planned: - SPI of 1.25 means the activity is progressing at 125% of the planned rate, or 25% ahead of schedule When SPI < 1, work is being completed slower than planned: - SPI of 0.80 means the activity is progressing at 80% of the planned rate, or 20% behind schedule The other options are incorrect because: - Resource usage relates to Cost Performance Index (CPI), not SPI - Work completion percentage and efficiency are different metrics from schedule performance - Baseline velocity and schedule compression references misinterpret the SPI metric's meaning SPI strictly measures the relationship between earned value and planned value, making it a pure schedule performance indicator.

Question 3

When analyzing schedule variances in your project, you notice that Activity Z has a Schedule Variance (SV) of -120 hours but its Cost Performance Index (CPI) is 1.15. What critical scheduling metric should you examine next?

Correct Answer: The Schedule Performance Index (SPI) to determine the efficiency rate of work completion

The Schedule Performance Index (SPI) is the most critical metric to examine next because: Given: - SV is negative (-120 hours), indicating the project is behind schedule - CPI is positive (1.15), indicating cost efficiency Reasoning: - SPI would provide the rate of schedule efficiency and complement the SV finding - SPI would quantify HOW efficiently the work is being completed relative to the plan - SPI combined with the negative SV gives a complete picture of schedule performance Why other options are less suitable: - EV/PV trend analysis is useful but premature before understanding the current efficiency rate - Critical path float patterns are important but secondary to understanding overall schedule performance efficiency - Resource utilization rates are more relevant to resource optimization than understanding schedule performance The negative SV already tells us we're behind schedule, but we need SPI to understand the efficiency rate of progress to make informed decisions about recovery actions.

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 Variance Analysis in Schedule Reporting questions
12 questions (total)
Start 12 question test