Earned Value Management (EVM) - Assignment

What does the Cost Performance Index (CPI) indicate in Earned Value Management?

• Schedule deviation from the plan

• The cost of completing the remaining work

• Cost efficiency of the work performed

• The time needed to complete the project

Answer explanation

CPI = EV ÷ AC and shows how efficiently the budget is being used. A CPI of 1 means on budget; greater than 1 means under budget; less than 1 means over budget.

Which of the following is the correct formula for Schedule Variance (SV)?

• SV = AC - PV

• SV = EV - PV

• SV = EV - AC

• SV = PV - EV

Answer explanation

Schedule Variance indicates how much ahead or behind schedule the project is. It compares earned value to planned value.

Your project has the following values:

• Planned Value (PV) = $200,000

• Earned Value (EV) = $180,000

• Actual Cost (AC) = $190,000

What is the Schedule Performance Index (SPI)?

• 0.95

• 1.05

• 0.90

• 1.10

Answer explanation

SPI = EV ÷ PV = 180,000 ÷ 200,000 = 0.90. This means the project is progressing at 90% of the planned schedule.

You’re tracking the performance of a construction project. The EV is $250,000 and the AC is $275,000. What does the Cost Variance (CV) tell you?

• The project is ahead of budget

• The project is under budget

• The project is on budget

• The project is over budget

Answer explanation

CV = EV - AC = $250,000 - $275,000 = -$25,000. A negative value indicates a cost overrun.

What does a To-Complete Performance Index (TCPI) greater than 1.0 indicate?

• The project is performing ahead of schedule

• The remaining work must be performed more efficiently than planned

• The project is under budget

• No additional performance improvement is required

Answer explanation

A TCPI > 1 indicates the project must improve cost efficiency to meet the budget.

You are working on a bridge construction project. You find the following:

• BAC = $500,000

• EV = $300,000

• AC = $350,000
  What is the CPI, and what does it mean?

• 1.17; project is under budget

• 0.86; project is over budget

• 1.17; project is over budget

• 0.86; project is under budget

Answer explanation

CPI = EV ÷ AC = $300,000 ÷ $350,000 = 0.86. Since CPI < 1, the project is over budget.

Which EVM term represents the budgeted cost of work scheduled to be done?

• Earned Value (EV)

• Actual Cost (AC)

• Planned Value (PV)

• Schedule Performance Index (SPI)

Answer explanation

PV is the budgeted amount for the work planned to be done up to a specific point in time.

You are evaluating two projects. Project A has a CPI of 1.10, and Project B has a CPI of 0.95.
Which statement is correct?

• Project A is over budget

• Project B is under budget

• Project A is more cost-efficient than Project B

• Both projects are equally efficient

Answer explanation

A CPI greater than 1 indicates better cost efficiency. Therefore, Project A is performing more efficiently than Project B.