Given the following information, calculate the CV, SV, CPI, and SPI for this pro

ID: 2748803 • Letter: G

Question

Given the following information, calculate the CV, SV, CPI, and SPI for this project. Also provide recommendations to improve the project’s performance if needed.

Activity A: This activity is complete. It was completed in 6 weeks; it was supposed to be completed in 5 weeks. The original budget for this activity was $400,000; in the end, it cost $450,000.

Activity B: This activity is 50% complete. Its original budget was $100,000. The costs to date are $55,000. The original project plan had this activity scheduled for 5 weeks; currently it is entering its third week.

Activity C: This activity is 75% complete. Its costs so far are $100,000. It is entering Week 4 of 5. It was planned to cost $100,000 when completed.

Activity D: This activity is not started yet; it will start in 2 weeks. It is planned to cost $400,000. Its costs to date are $0

Explanation / Answer

Solution: We have to calculate CV (cost variance) , SV(scheduled variance), CPI (cost performance index and SPI(scheduled performance index).

Activity A

Actual cost = $450,000

Planned value = $400,000

Earned value = $333,333.33

Activity B

Actual cost = 55000

Planned Value = $20,000

Earned Value = $25,000

Activity C

Actual Cost = $100,000

Planned value = $80,000

Earned value = $75,000

Activity D

Planned Cost = $400,000

Planned value = 0

Earned value = 0

Cost Variance = Earned Value - Actual Cost

Schedule Variance = Earned Value - Planned Value

Cost Performance Index= ratio of earned value to actual cost

Schedule Performance Index = Earned Value / Planned Value

Parameter

Calculation

Result

400,000+20,00+80,00

500,000

333,333.33+25,000+20,000

378,333.33

450000+55000+100000

605,000

378,333.33 – 605,000

226,666.67

CPI

378,333.33/500,000

0.756

378,333.33-500,000

121,666.67

SPI

378,333.33/605000

0.625

Over budget, getting $ 0.75 for every $ 1 and behind scheduled as rate is 62.5 % of planned rate.

The management should identify the reasons for this performance. Only after knowing the correct reasons corrective actions can be taken. Ensure that the schedule and budgets are realistic. Put in appropriate measures to catch budget and schedule variances early. Management can also take measure such as working overtime, increasing resource or seek extension of deadline.