Project Management: Analyzing Project Status with SPI and CPI Values

This assignment focuses on interpreting Schedule Performance Index (SPI) and Cost Performance Index (CPI) values in project management to report project status. With an SPI of 1.35, the project is ahead of schedule, indicating that the earned value is more than the planned value. Conversely, a CPI of 0.8 suggests that the project is over budget, as the earned value is less than the actual cost. The document explains the formulas for calculating SPI and CPI, emphasizing their importance in assessing project performance and providing a concise overview of a project's health based on these two key indicators. Desklib offers a platform to explore similar project management assignments and study resources.

Running head: PROJECT MANAGEMENT
Project Management
Name of the Student
Name of the University
Author’s Note

1PROJECT MANAGEMENT
The information provided in this task about a project is value of SPI = 1.35 (Schedule
Performance Index) and value of CPI = 0.8 (Cost Performance Index).
According to SPI concept, SPI is determined from fraction of Budgeted Cost of Work
Performed (BCWP) and Budgeted Cost of Work Scheduled (BCWS). Therefore, if SPI is greater
than one; it indicates that fraction of BCWP and BCWS is greater than one. It indicates that
BCWP is greater than BCWS; hence, Budgeted Cost of Work Performed is greater than
Budgeted Cost of Work Scheduled (Staley, 2016). In other words, BCWP is equivalent to earned
value (EV) and BCWS is equivalent to planned value (PV). Therefore, SPI = EV/PC. Here, SPI
= 1.35; this indicates that earned value is more than planned value and the project is “ahead of
schedule”.
Moreover, as per CPI concepts, CPI is determined from fraction of Budgeted Cost of
Work Performed (BCWP) and Actual Cost of Work Performed (ACWP). Therefore, if CPI is
lesser than one; it indicates that fraction of BCWP and ACWP is lesser than one (Fleming &
Koppelman, 2016). It indicates that BCWP is lesser than ACWP; hence, Budgeted Cost of Work
Performed is lesser than Actual Cost of Work Performed. In other words, BCWP is equivalent to
earned value (EV) and ACWP is equivalent to actual cost (AC). Therefore, SPI = EV/AC. Here,
CPI = 0.8; this indicates that earned value is lesser than actual cost and the project is “over
budget”.
Therefore, these two values SPI and CPI are enough to report status about any project.

2PROJECT MANAGEMENT
References
Fleming, Q. W., & Koppelman, J. M. (2016, December). Earned value project management.
Project Management Institute.
Staley, M. (2016). Advancing the Theory and Practice of Engineering Project Management by
addressing the issue of CPI Stability and Hidden Project Performance.