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Figure 7 – 12 usesS-curvestodisplayEVdataforaprojectthatisperformingoverbudgetand
behindschedule.

125 .Answer:D.

PMBOK® Guide, pages 260 – 265 , Section 7. 4. 2. 2 ; and Figure 7 – 12

Earned Value Management

...

Variances from the approved baseline will also be

Monitored:

...

Costvariance.Costvariance(CV)istheamountofbudgetdeficitorsurplusatagivenpointintime,
expressedas the differencebetween earnedvalue and theactual cost.Itis ameasure of cost
performanceonaproject.Itisequaltotheearnedvalue(EV)minustheactualcost(AC).Thecost
varianceattheendoftheprojectwillbethedifferencebetweenthebudgetatcompletion(BAC)and
the actual amount spent. TheCV is particularlycritical becauseitindicates the relationshipof
physicalperformancetothecostsspent.NegativeCVisoftendifficultfortheprojecttorecover,
EquationCV=EV–AC

TheSVandCVvaluescanbeconvened toefficiencyindicators toreflectthecostandschedule
performanceofanyprojectforcomparisonagainstallotherprojectsorwithinaportfolioofprojects.
Thevariancesareusefulfordeterminingprojectstatus.

...

Costperformanceindex.Thecostperformanceindex(CPI) isameasureofthecostefficiencyof
budgetedresources,expressedasaratioofearnedvaluetoactualcost.Itisconsideredthemost
criticalEVMmetricandmeasuresthecostefficiencyfortheworkcompleted.ACPIvalueoflessthan

1. 0 indicatesacost overrunforworkcompleted.A CPIvalue greaterthan 1. 0 indicates acost
   underrunofperformancetodate.TheCPIisequaltotheratiooftheEVtotheAC.Theindicesare
   usefulfordeterminingprojectstatusandprovidingabasisforestimatingprojectcostandschedule
   outcome.Equation:CPI=EV/AC

Thethreeparametersofplannedvalue,earnedvalue,andactualcostcanbemonitoredand reported
onbothaperiod-by-periodbasis(typicallyweeklyormonthly)andonacumulativebasis. Figure 7 –
12 usesS-curvestodisplayEVdataforaprojectthatisperformingoverbudgetandbehindschedule.

126 .Answer:D.

PMBOK® Guide, Pages 260 – 265 , Section 7. 4. 2. 2 ; and Figure 7 – 12

Earned Value Management

TheSVandCVvaluescanbeconvertedtoefficiencyindicatorstoreflectthecostandschedule
performanceofanyprojectforcomparisonagainstallotherprojectsorwithinaportfolioofprojects.
Thevariancesareusefulfordeterminingprojectstatus.

Schedule performance index. The schedule performance index (SPI) is a measure of schedule
efficiencyexpressedastheratioofearnedvaluetoplannedvalue.Itmeasureshowefficientlythe