Free CAPM® Exam Sample Question
The project is harder to complete within the budget if which of the following statements is true?
A. CPI is greater than 1.
B. SV is greater than 1.
C. SPI is greater than 1.
D. TCPI is greater than 1.
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HINT: Note that SPI and SV are schedule performance values.
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Answer and Explanation:
The correct answer is D.
To-complete performance index (TCPI) is an index, expressed as the ratio of the cost to finish the remaining work within the budget available. The TCPI is used to measure the efficiency in the cost performance that must be maintained to complete the project with the planned cost. Thus, TCPI is greater than 1 means that the project is harder to complete within the budget.
Details for each option:
A. CPI is greater than 1.
Incorrect. ‘CPI’ is the cost performance index, used to measure the cost efficiency for the work completed. When CPI is greater than 1.0, the project's earned value is greater than the actual costs, which indicates that the project will likely be easier to complete within the budget.
B. SV is greater than 1.
Incorrect. ‘SV’ is the schedule variance, expressed as the difference in time periods between the earned value and the planned value. When SV is a positive number (greater than zero), the project is ahead of schedule. When the SV is zero, the project is on schedule. When SV is a negative number, the project is behind schedule. In this case, having the SV greater than 1 is at least one time period ahead of schedule. However, such a project is not necessarily expected to be completed within the planned cost.
C. SPI is greater than 1.
Incorrect. ‘SPI’ is the schedule performance index, expressed as the ratio of earned value to planned value, used to measure the efficiency of the schedule. When SPI is greater than 1, the project is ahead of schedule. However, such a project is not necessarily expected to be completed within the planned cost.
D. TCPI is greater than 1.
Correct. ‘TCPI’ is the to-complete performance index, which a project manager uses specifically to measure how difficult the project will be to complete within the budget. TCPI means the cost performance and efficiency required to complete the project using the remaining resources available. A TCPI greater than 1 means the project will be harder to complete within the budget unless greater cost control is implemented.
Reference: A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) – Sixth Edition, Project Management Institute Inc., 2017, Page(s) 267