The approach I adopted is right or wrong? Hence, such deviation. I have already calculated EV and PV, but for example EV = 5000 and PV = 0 because the task has begun ahead of schedule. And Planned value = Actual cost. Thanks for your reply. Save my name, email, and website in this browser for the next time I comment. There is a difference between real world situation and virtual data. What does SPI stand for? As a rule of thumb, for Schedule performance index (SPI). The Schedule Performance Index gives you information on the time efficiency of your project. You want to make your profit work harder so you have looked at some investment opportunities available. If PV=AC=EV meaning you are on schedule and on budget. 13 minute read Updated: August 20, 2017 Harwinder Singh. I came here via yet another random internet search in my quest of a self-imposed mission to gain a better understanding of EVM concepts. What does SPI stand for in Project Management? The Salience Model for stakeholder analysis and classification helps to identify the prominence of project stakeholders according to 3 attributes - Power, Le... A Pareto Chart or Diagram, one of the Seven Basic Quality Tools, is a specific type of Histogram ordered by frequency of occurrence. Earned value at the end of week 2 is $1800 (calculate above under SPI Solution 2). For example, if SPI is 0.66, it tells us, we are behind schedule but question is this how much behind in terms of project time? So, the corrective actions taken by the project team seem to have raised the SPI from 0.8 to 0.9. The CPI ratio measures the efficient deployment of the resources used on the project. At completion the SPI is always marked as 1 irrespective of when the work was completed. • To insulate the current company offices at a cost of $10,000 which will provide a fuel savings of $1,500 per year over the next 10 years. You can expect to see about 10 questions on your PMP exam around EVM concepts. . Once you get these figure, you can run your analysis. It indicates that $0.66 of work is accomplished for every $1 spent on the project. Its OK, but my question was how to relate specially SPI with time duration? for example – planned efforts are as follows for each work item – requirement gathering = 40 hrs, design = 100 hrs. If the ratio has a value higher than 1 this indicates the project is progressing well against the schedule. Difference between Fixed Cost and Direct Cost, How To Get PMP Certification in Just 30 Days, visit this site for a step by step tutorial, Difference between Standards & Regulations for PMP Exam, Most Important Tips About PMP Exam Eligibility Criteria, https://www.youtube.com/watch?v=Ri3KFCoQuUo&list=PL6lTcPjBaSdW2mygJ0VA_Q9Nzesmg6VGc&index=5&t=0s, 3 Point Estimate: Triangular Distribution vs Beta Distribution (PERT), Cost Plus Incentive Fee Calculations For PMP Exam, Configuration Management & Change Management System: Differences, Do you need to memorize ITTO for the PMP Exam. It indicates that the project is right on schedule. Quick question. You are currently 45 percent complete with this project, though you are supposed to be at your second milestone which accounts for half of the project completion. B:100% complete. It is up to your organization to decide the benchmark for them depending on their risk tolerance. The project is under budget. You are doing well if the ratio is higher than one. Also watch for other paths in your network. Total budget for the project is $10,000. You have studied variance (SV and CV) and indexes (SPI and CPI). $800 is the Earned Value after week 1. AC = 10 millions & • Each programmer will charge $100 per hour. No. Substituting the values of EV and AC in the CPI formula, we get: We had calculated SPI after week 1 as 0.8, which was unfavorable. SPI and CPI depends on EV, PV and AC. We will take a look at two components of Earned Value Analysis - SPI and CPI in Project Management. Briefly explain how you derive the actual cost. The project team should be measuring and monitoring the project performance throughout the project to ensure that it remains on track. Hence SPI and CPI both will be equal to 1. Is my approach is right or wrong ? In other words, the value of work accomplished is more than the amount we have spent. After that the project will start delaying. Project managers rely on several statistical measures to determine how well a project is progressing, and whether it's expected to be completed on time and under budget. in fact progress for the 20 days has been: 2, 3, 4, 6, 7, 9, 12, 14, 15, 17, 20, 21, 22, 24, 26, 27, 29, 31, 33. what can you conclude about this project? Most of the time, if the schedule is extended beyond the deadline or time line, then additional cost is required to complete it. If the cost and schedule of the remaining tasks did not slip, how would the project perform (in terms of cost and time)? In this situation, you can assume the budget was distributed evenly for each month. c. Add more resources to expedite the schedule Schedule Performance Index (SPI) & Cost Performance Index (CPI). It is not possible to complete the project and spi is still 0.6 because once the project is complete, no work left and spi = 1. Schedule Performance Index (SPI) = EV / PV, Hence, the Schedule Performance Index is 0.8. The lower the value of SPI, the farther the project is from the schedule baseline.