what does cpi and spi mean

What is the difference between SPI and CPI in project management?

Schedule Performance Index (SPI) & Cost Performance Index (CPI) Schedule Performance Index (SPI) and Cost Performance Index (CPI) allow you to assess the project’s performance. Schedule performance and cost performance are the two most important parameters of your project. SPI and CPI help you analyze the efficiency of any project.

What does SPI stand for?

Schedule Performance Index (SP... Schedule Performance Index (SPI) and Cost Performance Index (CPI) are Earned Value Management (EVM) measures for project schedule and cost efficiency respectively. SPI and CPI are used to assess the magnitude (or amount) of variation from the established schedule and cost baselines.

What is the cost performance index and Schedule Performance Index (SPI)?

In project management, the Cost Performance Index (CPI) and Schedule Performance Index (SPI) are deemed important as they allow the project management professional (PMP) to assess the project’s performance and effectiveness of the project management.

What does CPI stand for?

The cost variance (CV), the schedule variance (SV), the cost performance index (CPI), and the schedule performance index (SPI) can be calculated by the calculator, where the interpretation of the findings will be provided.

What does a SPI less than 1 mean?

behind scheduleFor example, an SPI above 1 equates to being ahead of schedule, whereas an SPI under 1 means you're behind schedule. And, if your SPI is equal to 1, your project is exactly on schedule. In summary: SPI > 1: Project is ahead of schedule; more work has been completed than expected.

What does a CPI of 1.5 mean?

Understanding the Cost Performance Index If the result is more than 1, as in 1.25, then the project is under budget, which is the best result. A CPI of 1 means the project is on budget, which is also a good result. A CPI of less than 1 means the project is over budget.

What does a schedule Performance Index SPI of 0.67 mean?

Schedule Performance Index (SPI**)** = EV / PV = $90,000 / $135,000 = 0.67. This means for every estimated hour of work, the project team is completing only 0.67 hours (approximately 40 minutes).

What does the SPI tell you?

“The Schedule Performance Index (SPI) is a measure of schedule efficiency, expressed as the ratio of earned value to planned value.” At the core, the SPI gives insight into the accuracy of the predicted schedule compared to the actual schedule of the project.

What does it mean if CPI is high?

When there is an upward change in the CPI, this means there has been an increase in the average change in prices over time. This eventually leads to adjustments in the cost of living and income (presumably so that income is adjusted to meet a higher cost of living).

What does it mean if CPI is greater than 1?

performing well against the budgetIf the ratio has a value higher than 1 then it indicates the project is performing well against the budget. A CPI of 1 means that the project is performing on budget. A CPI of less than 1 means that the project is over budget.

What does a cost performance index CPI of 0.73 mean?

A CPI ratio with a value higher than 1 indicates that a project is performing well budget-wise. A CPI value of 1 indicates that a project is performing on budget. A CPI value that is less than 1 indicates that a project is over budget.

How are SPI and CPI used in monitoring the project?

CPI is calculated by dividing Earned Value by Actual Cost. CPI is an indicator of how efficiently project resources are performing relative to the project budget. SPI is calculated by dividing Earned Value by Planned Value. SPI measures the performance of resources relative to the project schedule.

How can I improve my schedule performance index?

Here are 6 ways to review your schedule performance and see if you are making the progress you expected.Earned Value. ... RAG/RYG Indicators. ... Progress against milestones. ... Team morale. ... Tracking Gantt chart. ... Status review meetings.

How do you calculate CPI from PMP?

Calculating Cost Performance Index Using the formula CPI = EV / AC, the project manager will have a value of less than 1 (project over budget), of 1 (project on budget), or greater than 1 (project under budget). CPI in project management measures the cost efficiency of a project.

Which is true of the schedule Performance Index SPI?

Which of the following is true of the schedule performance index (SPI)? It can be used to estimate the projected time to complete the project. Which of the following is true of earned value? It is an estimate of the value of the physical work actually completed.

Why do you calculate the cost performance index and schedule performance index of a project?

Cost Performance Index and Schedule Performance Index In a Nutshell. It measures cost efficiency, how much the project has spent for the work done at a particular period. < 1.0 means the project is over budget (bad). 1.0 means the project is within the estimated budget (good).

How do you interpret CPI?

Understanding how CPI works The CPI uses the average price changes for an established basket of goods and services to demonstrate price trends within the economy. An increase in the value of the index offers a quantitative measure of inflation, or the decline of the dollar's purchasing power over time.

What does a low CPI mean?

If the CPI declines, that means there's deflation, or a steady decrease in the prices of goods and services. The CPI is compiled and released every month by the Bureau of Labor Statistics (BLS), which is a sub-agency of the Department of Labor.

What is the CPI rate for 2022?

The Consumer Price Index increased 8.5 percent for the year ended March 2022, following a rise of 7.9 percent from February 2021 to February 2022.

What is the current CPI rate?

The Consumer Prices Index (CPI) rose by 9.9% in the 12 months to August 2022, down from 10.1% in July.

What is the difference between CPI and SPI?

CPI is the measurement of deviation from the estimated cost of the project. SPI is the deviation from the scheduled time for project. CPI = Earned Value / Actual Cost. SPI = Earned Value / Planned Value. If CPI is less than 1 then project is over budget. If SPI is less than 1 then project is behind schedule .

What happens if CPI is less than 1?

If CPI is less than 1 then project is over budget. If SPI is less than 1 then project is behind schedule. If CPI is greater than 1 then project is under budget. If SPI is greater than 1 then project is ahead of schedule. If CPI is equal to 1 then project is on estimated budget.

What is the cost performance index?

Cost Performance Index (CPI) is the measure of the cost efficiency of project. It is expressed as a ratio of earned value to actual cost. Schedule Performance Index (SPI): Schedule Performance Index (SPI) is the measure of schedule efficiency of the project.

What is the purpose of schedule performance index?

SPI and CPI are used to assess the magnitude (or amount) of variation from the established schedule and cost baselines. These are basic EVM concepts in project management that every project manager and PMP aspirant needs to know well. You can expect to see about 10 questions on your PMP exam around EVM concepts. I have several posts covering EVM on this blog. Make sure to read those as well.

What is SPI in PMBOK?

According to the PMBOK ® Guide, the schedule performance index (SPI) is a measure of schedule efficiency on a project and is expressed as the ratio of Earned Value (EV) to Planned Value (PV). It is used to measure how efficiently the project team is using the time on the project.

What is the most important measure of earned value?

CPI is considered as the most critical earned value measure, and is one of the most important concepts for the exam. SPI and CPI values of less than 1 are considered unfavorable and the values greater than 1 are considered favorable. Earned value measures such SPI and CPI help to forecast future project performance.

What does SPI mean in project management?

It indicates that the project is right on schedule. SPI < 1 (SPI less than 1) This would happen when the Earned Value is less than the Planned Value. It indicates that the project is behind schedule (an unfavorable condition). The lower the value of SPI, the farther the project is from the schedule baseline.

What does it mean when the actual cost is more than the earned value?

In other words, the value of work we are accomplishing is less than the amount we have spent.

What is the minimum CPI value?

The lower the value of CPI, the farther the project is from the cost baseline. Note that since the Earned Value cannot be negative, the minimum CPI value is 0.

What does it mean when SPI is less than 1?

SPI is less than 1 after week 1. As mentioned above, if SPI is less than 1, it indicates that the project is behind schedule, which indeed is the case. Armed with this information, Alex discusses the situation with his project team and devises a plan to bring the project back on schedule.

What does CPI mean in math?

In mathematical terms, CPI = BC / AC. If the CPI ratio is less than one, the actual cost is higher than the budgeted cost, thus the project is over budget. If the CPI equals one, the project is on budget. A CPI greater than one means that the project is under budget. 00:00.

What is the CPI ratio?

The CPI ratio measures the efficient deployment of the resources used on the project. The ratio is calculated as the relationship between the budgeted cost of the work completed (BC) and the actual cost of the same work (AC).

What does it mean when SPI is less than one?

In mathematical terms, SPI = BC/SC. If the SPI is less than one, the budgeted cost of work scheduled is higher than the budgeted cost of the work completed, thus the project is behind schedule. If the project has an SPI of one, the project is on schedule. An SPI higher than one means that the project is ahead of schedule.

What does a CPI of 0.75 mean?

If a different project has a CPI ratio of 0.75, the project is running at 25 percent over budget. The project manager must find ways to cut costs and bring the project in closer to the budget.

How to find critical ratio?

Project managers find the Critical Ratio by multiplying the CPI and SPI.

How to Calculate Cost Performance Index?

Cost Performance Index (CPI) can be calculated by dividing the earned value (EV) by the actual cost (AC). It can be determined by measuring the ratio of the earned value to the actual cost. In order to assess the overall project’s CPI, the underlying earned value and actual cost must be measured on a task by task basis and summed up. Each task must be assigned with the data on the start and finish dates, as well as the budget of the project. This is known as the cost baseline, and it sets a benchmark for the project manager to compare against. Project scheduling is one of the most critical aspects of project management, and this preparation phase that involves calculating the CPI is a part of it.

Why is 0.69 USD a low value?

This means that for every 1 USD spent, you receive 0.69 USD because the Cost Performance Index (CPI) is less than one. It means that you are over budget. The value that is lower than 1 shows that the cost-efficiency parameters for the project are deemed to be less favourable.

What is CPI in project management?

In particular, CPI refers to a method, chart, or other tools that are applied for the purpose of determining and measuring the actual cost-effectiveness of a project.

What does CPI mean in project?

The CPI = 0.5 value indicates that the project has spent twice the amount that it should have at this point. When the CPI = 1.0, it means that the project is on budget. Meanwhile, if the CPI = 2.0, it means that the project has spent half the amount that it should have at this point.

What does it mean when the CPI is greater than 1?

If the resulting value is greater than one, it shows that the cost-efficiency parameters for the project are deemed favourable.

What are the two most important parameters of project management?

The two most critical parameters of project management are schedule and cost-efficiency . The cost performance index (CPI) is an element of Earned Value (EV) variance analysis techniques that, according to PMI methodology, are part of the “control cost” phase of a project which enhances cost-efficiency. The cost performance index is used at a time or over several project cycles to measure costs and earned benefits. For every money spent on the project, it determines how much one earns, thus, reveals just how well the project sticks to the budget. It also assists the project management professional to determine whether their performance in project management is up to standard by conducting a cost-performance analysis.

What is a CPI?

There are plenty of indicators of the project’s performance and CPI is deemed as one of the common performance indicators. This indicator often shows whether the project is going according to the planned schedule or whether there is a need for any corrective action. CPI can assist a project manager to evaluate if the project is on budget ...

Schedule Performance Index

Cost Performance Index

Key Takeaways About SPI and CPI

• Let’s recap the key points we learned so far, and a few additional notes. 1. Earned value management encapsulates scope, schedule and cost performance in order to measure and forecast project performance. 2. SPI is a measure of schedule efficiency and is measured as a ratio of Earned Value to Planned Value. 3. CPI is a measure of cost efficiency an...

See more on deepfriedbrainproject.com

Next Step