In the PMP Exam, there are atleast 4-5 questions that only focus on simple interpretation of the Schedule Performance Index (SPI) or the Cost Performance Index (CPI). There questions are from the Cost Management or Time Management Knowledge Areas, as defined in the PMBOK Guide.
Some such questions require you to do minor calculations. As long as you know the simple formulas for SPI and CPI, you can easily score in this area of PMP questions. You can attempt over 600 mock PMP questions in the PMChamp Online PMP Training.
I have written earlier on What is SPI and where is it used earlier. You can also read about How to Answer PMP Questions.
Mock PMP Question: You are working on the Butter Factory project. The equipment has arrived, and the installation work has begun. It is scheduled for 4 weeks and budget at completion is USD40,000. After the completion of the first week, you noticed that 20% of the work has been completed and the actual amount spent so far has been USD15,000. What is the Schedule Performance Index?
Choices:
A 0.5
B 0.6
C 0.8
D 0.9
Go ahead, try it out. Then you can continue to read, and check your understanding and the correct answer.
Correct Solution:
To answer this, let’s find out the given values:
BAC (Budget at Completion): 40,000
AC (Actual Cost): 15,000
Duration: 4 weeks project.
Therefore in 1 week, 25% should be planned to complete.
Right now, we are at the end of the First Week, and 20% of the work is completed.
Planned Value of 1 Week: 25% of BAC = 25% OF 40,000 = 40,000 / 4 = 10,000
Earned Value: 20% of 40,000 = 8,000
As you can see, we planned to finish 10,000 worth of work, but we only managed to get 20% ($8,000) worth of work done. Thus we are behind. Thus SPI has to be less than 1, not a good situation to be in.
SPI = EV / PV = 8,000 / 10,000 = 0.8
Correct Answer is Option C. As you can see, such questions are easy to score if you practice, and are able to identify correctly what is the EV, AC, PV, etc. in a question.
PMP Exam Experience:
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Cheers,
Vinai Prakash, PMP, ITIL, GAP, Six Sigma Certified
Founder & Principal Coach at PMChamp.com