Question

: A project has just completed the 87th item in its plan. It was scheduled to have spent $168,000 at this point in the plan, but has actually spent only $156,000. The foreman estimates that the value of the work actually finished is about $162,000. What are the spending and schedule variances for the project? What are the SPI and CPI?

Answer 1

Answer:

spending = $6,000

Scheduled variance= -$6,000

SPI = 0.964

CPI = 1.038

Explanation:

Define the values.

The project value (PV) = $168,000

The actual cost (AC) = $156,000

Estimated value (EV) = $162,000

FIND THE SPENDING:

The spendings are the cost value, which is calculated as

CV = EV - AC

CV = $162,000 - $156,000 = $6,000

FIND THE SCHEDULED VARIANCE:

The scheduled variance (SV) is calculated as

SV = EV - PV

SV = $162,000 - 168,000 = -$6,000

FIND THE SCHEDULED PERFORMANCE INDEX (SPI)

SPI = EV ÷ PV

SPI = $162,000 ÷ $168,000 = 0.964

FIND THE COST PERFORMANCE INDEX (CPI)

CPI = EV ÷ AC

CPI = $162,000 ÷ $156,000 = 1.038