How do you compute SPI and CPI, and what do values indicate?

How do you compute SPI and CPI, and what do values indicate?

• A. SPI = EV / PV; CPI = EV / AC; values > 1 indicate ahead of schedule.
• B. SPI = EV / PV; CPI = EV / AC; values > 1 indicate ahead of schedule or cost efficiency.
• C. SPI = PV / EV; CPI = PV / AC; values > 1 indicate cost overruns.
• D. SPI = PV / EV; CPI = EV / PV; values > 1 indicate on track.

Answer: (B)

In Earned Value Management, the Schedule Performance Index (SPI) and Cost Performance Index (CPI) quantify how you’re doing against the plan. SPI compares what you’ve earned to what you planned to have earned, while CPI compares what you’ve earned to what you actually spent. The correct formulas are SPI = EV / PV and CPI = EV / AC, where EV is Earned Value, PV is Planned Value, and AC is Actual Cost. Values greater than 1 mean you’re performing better than the baseline: SPI > 1 indicates you’re ahead of schedule (you’ve earned more value than planned for the work completed), and CPI > 1 indicates cost efficiency (you’re spending less than planned for the work performed). Values less than 1 signal behind schedule or cost overruns. The correct option uses these formulas and the interpretation that values above 1 reflect favorable performance in either schedule or cost. The other formulations mix up the ratios or misstate what a value above 1 signifies.

In Earned Value Management, the Schedule Performance Index (SPI) and Cost Performance Index (CPI) quantify how you’re doing against the plan. SPI compares what you’ve earned to what you planned to have earned, while CPI compares what you’ve earned to what you actually spent. The correct formulas are SPI = EV / PV and CPI = EV / AC, where EV is Earned Value, PV is Planned Value, and AC is Actual Cost.

Values greater than 1 mean you’re performing better than the baseline: SPI > 1 indicates you’re ahead of schedule (you’ve earned more value than planned for the work completed), and CPI > 1 indicates cost efficiency (you’re spending less than planned for the work performed). Values less than 1 signal behind schedule or cost overruns.

The correct option uses these formulas and the interpretation that values above 1 reflect favorable performance in either schedule or cost. The other formulations mix up the ratios or misstate what a value above 1 signifies.