Schedule Performance Index (SPI) & Cost

Performance Index (CPI)

By Fahad Usmani 113 Comments

Today we are going to discuss Schedule Performance Index (SPI) and Cost Performance
Index (CPI). Like variances, indexes also let you analyze the health of the project.

They help you analyze the efficiency of schedule performance and cost performance of the
project.

This blog post is the fourth blog post in a series of seven on earned value management and
project forecasting.
If youre coming here through any search engine or a referral, I suggest you go through my
previous three blog posts before reading this post.

Here are the links for these blog posts:

Earned Value Management

Elements of Earned Value Management

Schedule Variance and Cost Variance

I hope you now have a better understanding of the terms discussed in the above blog posts, so
lets discuss Schedule Performance Index and Cost Performance Index.

Schedule Performance Index (SPI)

The Schedule Performance Index tells you how efficiently you are actually progressing
compared to the planned progress.

As per the PMBOK Guide, The Schedule Performance Index (SPI) is a measure of schedule
efficiency expressed as the ratio of earned value to planned value.

The Schedule Performance Index gives you information about the schedule performance of
the project. It is the efficiency of the time utilized on the project.

Formula for the Schedule Performance Index (SPI)

The Schedule Performance Index can be determined by dividing earned value by planned
value.

Schedule Performance Index = (Earned Value)/(Planned Value)

SPI = EV/PV

With the above formula you can conclude that:

If the SPI is greater than one, this means more work has been completed than the
planned work. In other words, you are ahead of schedule.

If the SPI is less than one, this means less work has been completed than the planned
work. In other words, you are behind schedule.

If the SPI is equal to one, this means all work is completed.

While calculating the Schedule Performance Index, make sure that you consider all tasks.
Sometimes you may only consider the tasks on the critical path and ignore the rest, which
causes the wrong result.
Therefore, ensure that non-critical activities are not ignored.

Example of the Schedule Performance Index (SPI)

You have a project to be completed in 12 months and the cost of the project is 100,000 USD.
Six months have passed and 60,000 USD has been spent, but on closer review you find that
only 40% of the work has been completed so far.

Find the Schedule Performance Index and deduce whether the project is behind or ahead of
schedule.

Given in the question:

Actual Cost (AC) = 60,000 USD

Planned Value (PV) = 50% of 100,000 USD

=50,000 USD

Earned Value (EV) = 40% of 100,000 USD

= 40,000 USD

Now,

Schedule Performance Index (SPI) = EV / PV

= 40,000 / 50,000

= 0.8

Hence, the Schedule Performance Index is 0.8

Since the Schedule Performance Index is less than one, you are behind schedule.

Cost Performance Index (CPI)

The Cost Performance Index helps you analyze the efficiency of the cost utilized by the
project. It measures the value of the work completed compared to the actual cost spent on the
project.

As per the PMBOK Guide The Cost Performance Index (CPI) is a measure of the cost
efficiency of budgeted resources, expresses as a ratio of earned value to actual cost.

In simple words, the Cost Performance Index informs you of how much you are earning for
each dollar spent on the project. The Cost Performance Index in an indication of the cost
performance of the project.

Formula for the Cost Performance Index (CPI)

The Cost Performance Index can be determined by dividing earned value by actual cost.

Cost Performance Index = (Earned Value)/(Actual Cost)

CPI = EV/AC

With the above formula you can conclude that:

If the CPI is less than one, you are earning less than the spending. In other words,
youre over budget.

If the CPI is greater than one, you are earning more than the spending. In other words,
you are under budget.

If the CPI is equal to one, this means earning and spending are equal. You can say that
you are proceeding exactly as per the planned budget spending, although this rarely
happens.

Example of the Cost Performance Index (CPI)

You have a project to be completed in 12 months and the cost of the project is 100,000 USD.
Six months have passed and 60,000 USD has been spent, but on closer review you find that
only 40% of the work has been completed so far.

Find the Cost Performance Index for this project and deduce whether you are under budget
or over budget.

Given in the question:

Actual Cost (AC) = 60,000 USD

Planned Value (PV) = 50% of 100,000 USD

= 50,000 USD

Earned Value (EV) = 40% of 100,000 USD

= 40,000 USD

Now,

Cost Performance Index (CPI) = EV / AC

= 40,000 / 60,000

= 0.67

Hence, the Cost Performance Index is 0.67

Since the Cost Performance Index is less than one, this means you are earning 0.67 USD for
every 1 USD spent. In other words, you are over budget.

A consistently high or low value of SPI or CPI is an indication that something is wrong with
your planning and/or cost estimates. In this case, check all assumptions and estimates for
their correctness and take corrective action if needed.

What is the difference between Cost Variance, Schedule Variance and Cost Performance
Index, and Schedule Performance Index?

You have studied the variances and indexes. Now you will be thinking that if you get the
same information from both sets of parameters (i.e. variances and indexes), why cant you
just discard one set of parameters? Why arent only schedule variance and cost variance taken
into account, or one schedule performance index and cost performance index?

In fact, both are required, and there is a difference between variance and index. With
variances you find the difference between the two values, and with indexes you get the ratio
between the two values.

In cost or schedule variance, the result comes in dollar form. If this number is negative, you
say that the project is in bad shape. However, if this number is positive, you say that the
project is in good shape. The problem with variance is that you cannot compare the health of
the project with another project if your organization has many projects.

Therefore, you use the Performance Indexes to compare the health of the project among
many projects. The Performance Index is the ratio between the parameters, and only a
glimpse of these ratios will be sufficient for you to get an idea about the health of the project.
This makes it easier for you to compare the relative health of all projects.

Moreover, to get the efficiency, you need indexes.

Summary

As with variances, indexes help you analyze the progress of the project. With the help of
indexes you can quickly find out whether you are performing well or poorly. With indexes, if
the ratio is greater than one you are doing well, and if the ratio is less than one it means there
is a problem with the project and you must take some corrective action to bring these
parameters under acceptable limits.

Here is where this blog post on Schedule Performance Index and Cost Performance Index
ends. This also completes our discussion on concepts related to earned value management. In
the next blog post we will discuss forecasting techniques: Estimate at Completion, Estimate
to Complete, and To Complete Performance Index.

If you are interested in learning all the mathematical formulas for the PMP exam, you can try
my PMP Formula Guide. You can also try my PMP Question Bank to practice 400 PMP exam
sample questions.

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Comments

1. Sitara says

August 16, 2012 at 11:09 AM

Hi! If you have a CPI = 1 and a SPI = 0,2, would you then expect the project to be
over-budget by the end? Let's say they should have finished by year end, but instead
they decleare to finish about May next year.
Also, there will be no reduction in resources on the way.
It seems to me, there is a contradiction between having av SPI<1 and a CPI=1, as long
as the project is still ongoing for some time, and amount of resources is not reduced

Reply

o Fahad Usmani says

August 16, 2012 at 9:20 PM

Hello Sitara! Thanks for visiting my blog.

As you said if the CPI = 1 and SPI = 0.2, I would say that this condition is
really bad or I should say that the project is in worst shape and something
terribly wrong with the schedule. In this case the project manager will review
the project schedule and the network diagram. There must be some mistakes
with it otherwise the condition you mentioned is rare.

Let us say that the schedule is OK, then the project manager has two options to
complete the project, either by fast tracking or by crashing. If he can manage
to complete the project by fast tracking then he would not be needing any
extra money otherwise a fresh cost estimation will be required.

Reply

Ram says

September 10, 2014 at 2:22 PM

Hi Fahad. Good discussion. In this case, we see the budget is

exhausted. So how could we say fast tracking/crashing will not require
additional money is in both cases additional resources will be required
to complete the job.

Thanks
Ram

Reply
 Fahad Usmani says

September 11, 2014 at 7:38 AM

Since the CPI is 1, the project budget is not exhausted.

Reply

2. Taylor says

October 22, 2012 at 5:07 PM

How would you explain a situation in which the CPI is greater than 1 but the SPI is
less than 1?

Reply

o Fahad Usmani says

October 22, 2012 at 8:09 PM

If CPI is greater than one, it means that youre under budget. If SPI is less than
one, it means you re behind the schedule.

These parameters are simple telling you that; although, you are spending less
money to complete the work but you are moving very slowly. You must speed
up activities to cover up the schedule delay.

Reply

o Atul Kr Rastogi says

June 10, 2016 at 2:48 PM

the PM is spending less or is constrained to spend and as a result the project is

moving slowly.

Reply

Fahad Usmani says

June 15, 2016 at 7:17 PM

Moving slow? You mean behind the schedule?

Reply

3. rashmita says
December 5, 2012 at 4:03 PM

hello sir,can you please solve out a problem.i have given a project and details of the
project are.
Your company is doing well and has a profit of about $25,000 that you need to invest.
The money is currently in a savings account earning an interest of 5% per annum and
is guaranteed for the next 5 years.
You want to make your profit work harder so you have looked at some investment
opportunities available. They are
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.
To pay the lump sum of $15,000 to the mortgage of $50,000 that has a loan term of
10 years at 7% interest per annum.
To invest $15,000 into a new business, which has been estimated to return double
the amount in 5 years time.

(a) Given the profit you have and assuming a discount rate of 5%, perform and
document appropriate NPV calculations for all possible investment options you
identified. You can work out your calculations using Microsoft Excel. Ensure you
[8 marks]
(b) From your calculations in (a), which investment would you take up and why?
[2 mark]

Question 2 (10 marks)

You are building a new office for your company. After some discussion with your
builder, you identified some of the key tasks, the duration and the costs to complete
the build. As you are a project manager you have decided to monitor the progress of
their build using Earned Value Management (EVN). Answer the following questions
using the following information

ID Task Name Cost ($) Start Date Duration

1 Lay foundations 40,000 April 1, 2013 2 weeks
2 Build frame 27,000 April 2013 4 weeks
3 Install pipes and electrical 20,000 May 2013 6 weeks
4 Make house water-tight 50,000 July 2013 8 weeks
5 Install internal walls and bathroom 25,000 September 2013 12 weeks
6 Install cabinetries 10,000 December 2013 4 weeks
7 Paint house 6,000 January 2014 2 weeks
8 Install light fixtures and appliances 3,000 January 2014 2 weeks

NOTE: Assume that no task is scheduled to run concurrently, e.g., Task 2 starts after
Task 1 completes, Task 3 starts only when Task 2 completes, and so on. Also, assume
that each month is made up of exactly four weeks.
(a) What is the planned value of the entire project?
[1 mark]
(b) The project manager has managed to keep cost to what was originally budgeted
above. At this point, the project has completed Task 4. Up to this point,
i. What is the planned value of the project?
ii. What is the actual cost (AC) of the project? Briefly explain how you derive the
actual cost.
iii. What is the rate of performance (RP) for each task? Using the RPs obtained,
calculate the earned value (EV), schedule variance (SV), Cost Performance Index
(CPI), and Schedule Performance Index (SPI) of the project.
[1 + 1 + 1 marks]
(c) Unfortunately, two trades resigned after Task 5 was completed and this caused the
remaining tasks to exceed its original cost and schedule by 25%, 50%, 50%
respectively.At the end the project,
i. What are the CPI and SPI?
ii. How is the performance with respect to cost and time?
iii. If the cost and schedule of the remaining tasks did not slip, how would the project
perform (in terms of cost and time)?
[2 + 2 + 2 marks]

Reply

o Jason says

February 8, 2013 at 1:15 AM

Hi Fahad,
this is a question from an assignment, so please ignore it and perhaps delete
the question/posting.
Rashmita, I suggest you do some study as this is on the exam.

Regards

Jason

Reply

Jacinto Mendes says

May 21, 2015 at 5:15 PM

HAHAHAHAHA I cant believe it; someone actually posted this here.

Im in SIT764 too.

Reply

Ejike says

October 12, 2015 at 7:10 PM

cant stop laughing. It is a blog that answers questions though. So I dont

need to solve my assignment . Please solve your school assignment
afterall.

Reply
 o Stefan says

May 29, 2014 at 3:33 PM

you have your budget. create a schedule. make WBS for each area & resource
load. baseline the schedule. you cannot get any calculation other than one if
your performance is 0. if you do nothing, you cannot compare.
all of the areas can be separated for the analysis, and aggregate.

Reply

o Amir Arif says

November 24, 2015 at 11:50 AM

I cant believe that you even pasted the marks of the questions. LOL

Reply

4. madsanjiv says

February 17, 2013 at 1:35 PM

when calculating the CPI and SPI values, do we have to multiply it by 100% to get a
percentage value?

Reply

o Fahad Usmani says

February 17, 2013 at 10:06 PM

No, you do not need to multiply it by any number.

Reply

o Amir Arif says

November 24, 2015 at 11:51 AM

Sanjiv, these are ratios, not percentages.

Reply

5. MD. Abdus Samad says

March 4, 2013 at 5:50 PM

Thanks a lot
 Reply

6. Maya says

March 29, 2013 at 12:42 AM

In this blog u said that for every rupee v r earning .67 but, if cpi<1 doesnt thar mean
we are running over budjet and we dont have enough money ?

Reply

o Fahad Usmani says

April 7, 2013 at 12:24 PM

It means we are over budget and if no corrective action is taken then funds
may finish soon.

Reply

7. majid says

April 19, 2013 at 9:27 AM

hi
can u say, what are they is good or excelent?
from cpi or spi?

if ur answer no exellent ru have a approach for this ?

Reply

o Fahad Usmani says

April 19, 2013 at 12:54 PM

Hello Majid,

I did not get your question correctly, can you just explain it again.

Reply

8. Majid says

April 19, 2013 at 7:07 PM

I have spi and cpi

1-then my teacher say why[spi and cpi ]is bad ?(or why cpi , spi bad indicator ?)
2-and what approach for Alternative [cpi , spi]?
 Thanks

Reply

o Fahad Usmani says

April 21, 2013 at 7:29 AM

SPI and CPI are just an indicator that in which direction your project is
leading. CPI and SPI are good or bad, it depends in condition of your project.

Reply

9. Majid says

April 21, 2013 at 12:09 PM

Hi

can you help me at this Exercises for cod source

Assumed: I have a 8 task and 50 day

my teacher say student must Design gant chart With c# and 3input text file ?

your Sincerely . Majid

Reply

o Fahad Usmani says

April 22, 2013 at 7:35 AM

Sorry Majid, Ive no idea about it.

Reply

10. realist says

June 17, 2013 at 8:07 PM

You say in your explanation that the performance index value lies between 0 and 1.
However, the CPI and SPI values can exceed 1 in the project is doing well.

Reply

o Fahad Usmani says

June 18, 2013 at 7:22 AM

 That was an error Corrected.

Thanks for pointing it out.

Reply

11. Mia67 says

June 21, 2013 at 9:56 PM

Hi,

Just a question: If you have both PV, EV and AC for 6 tasks, how to calculate the SPI
for the work package /6 tasks/?

Reply

o Fahad Usmani says

June 22, 2013 at 1:47 PM

SPI = Schedule Performance Index.

As the name suggests, SPI is calculated for the schedule not for any individual
activities, task or the work package.

In your case, you will roll all activities up and then calculate the SPI.

These information are used in Performance Report to show the progress and/or
forecast for the project to the management. Management want to see the whole
picture at broad level, they wouldnt be interested in seeing the status of
thousands of activities or hundreds of work packages.

Reply

o M Alam says

September 12, 2015 at 8:20 PM

the key to calculate spi/cpi at work package level is to know the percentage
completion of work package. for example planned efforts are as follows for
each work item requirement gathering = 40 hrs, design = 100 hrs. Build and
Test = 200 hrs. %completion of each work item, requirement gathering =
100%, design = 40%, build and test = 20%. So, work package completion can
be calculated as (40*1+100*0.4+200*0.2)/(40+100+200) = 120/340 = 6/17
= ~30%.
once you know the percentage completion at package level, you can calculate
spi/cpi at package level by summing up efforts of each items and considering
earliest start date and latest finish date of the project/package.
 Reply

Fahad Usmani says

September 17, 2015 at 11:52 AM

Well said Alam.

Reply

12. Gnpth says

January 16, 2014 at 11:33 AM

Hi Usmani,

I just have one question.

Whether the task type of each task have impact on SPI, CPI and other EVM Metrics?.

for example, will the fixed duration tasks impact on SPI and CPI differ from the SPI
and CPI values for fixed units and fixed work? if so, how?

Reply

o Fahad Usmani says

January 18, 2014 at 2:47 PM

I did not understand what you want to ask?. Can you just clarify it again

Reply

Gnpth says

February 13, 2014 at 10:18 AM

I mean,

Does the task types (fixed duration, fixed work and fixed units) plays
hand in determining the CPI and SPI values?

Reply

Stefan says

May 29, 2014 at 3:36 PM

 on the start of the project these will allow you to determine
your baseline. all your work is compared to the baseline.

Reply

13. Gaurav says

March 14, 2014 at 9:05 AM

Great explanation Fahad !

One question I have..

If SPI is less than 1.. say 0.6 of course it means we are behind the schedule..does it
always mean that deliverable have not been met ?
Can it be possible that project is complete with all deliverable accepted by customer..
but SPI is still 0.6 ?

Thanks

Reply

o Fahad Usmani says

March 15, 2014 at 1:44 PM

Deliverable can be met even if the project is behind schedule.

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.

Reply

Gaurav says

March 21, 2014 at 7:56 PM

Thanks Fahad !

Reply

Som says

June 4, 2014 at 12:31 AM

How is that possible Fahad Deliverables are met, but the project is
behind schedule? Can you elaborate?

Reply
 Fahad Usmani says

June 4, 2014 at 8:02 AM

Suppose you are working a multi-year project, and you have to

deliver some deliverables at some intervals.

And if you deliver a few of these deliverables late, you will say
that although the deliverables are met but the project is behind
schedule.

Reply

Som says

June 4, 2014 at 10:01 PM

Still could not get it. Let us a say Project X has 3

deliverables D1, D2 and D3. D1 will be on Day 15,
D2 will be Day 30 and D3 on Day 45.

If I am saying on 45th Day that D3 will be delivered on

Day 50, then Project is behind schedule. But are the
deliverables met? No. Then saying that D3 is met is
not it wrong?

In such a case yes, D1 and D2 are met and SPI will be

1 for them, but will be D3 be of SPI = 1? And more
importantly will project be at SPI = 1? No. As
Cumulative SPI will pull it below 1.

Or am I understanding differently?

Reply

Fahad Usmani says

June 4, 2014 at 11:40 PM

Yes, youre right.

In this case you were proceeding in correct

direction until you deliver D2, however, after
delivering it you deviate and the schedule is
delayed.

Reply

Som says
 June 4, 2014 at 11:55 PM

Thanks Fahad.

The correct wordings would be Project

can be delayed and SPI can&will be
below 1, however some deliverables can
be met, but NOT all. When i read first
time, it felt like Project can be delayed,
but deliverables are met meaning all,
which is not the case.

Btw, what will be you take on CPI in

such a case for D1, D2, D3 and the
complete Project after the project is
delivered (i.e.,delayed and delivered)?
Will it be 1 for all or different?

Reply

Fahad Usmani says

June 5, 2014 at 12:05 AM

Regarding CPI, you need to see

how much you have earned and
how much has been spent.

Reply

14. Pierre Bergeron says

May 24, 2014 at 4:58 PM

Hello, do you have CPI and SPI benchmarks recognized internationally? And do You
have them in th hi-tech RD businesses?

Regards and thanks

Pierre

Reply

o Fahad Usmani says

May 25, 2014 at 7:48 AM

General understanding says that it should revolve around 1. Some

organizations are comfortable with 0.9 to 1.1 and others are not.
 It is up to your organization to decide the benchmark for them depending on
their risk tolerance.

Reply

15. ilyas says

June 2, 2014 at 12:24 AM

sir Fahad Usmani sb would you like to send me primavera p6 notes?

Reply

o Fahad Usmani says

June 2, 2014 at 11:20 AM

I will search for it, will send you if I get something.

Reply

16. k.s. says

July 28, 2014 at 6:55 AM

Hello,

Do you think CPI and SPI would help determine whether the project is behind or
ahead of schedule?

K.S.

Reply

o Fahad Usmani says

July 28, 2014 at 8:35 PM

Yes, Schedule Performance Index (SPI) helps you determine whether the
project is behind or ahead of schedule.

Reply

17. Aseem says

August 21, 2014 at 9:00 PM

Hello sir can you help me in solving one problem

There a project A which is to be completed in 20 days but it gets completed in 10
days.
And Planned value = Actual cost

What will be the CPI & SPI of the project and how?

Reply

o Fahad Usmani says

August 23, 2014 at 11:49 AM

Since the project is completed, this means SPI = 1

SPI = EV/PV

1 = EV/PV

EV = PV

Now CPI = EV/AC

According to the question, AC = PV

And PV=EV

This means,

CPI = EV/EV
=1

Hence SPI and CPI both will be equal to 1.

Hope it helps.

Reply

Aseem says

August 23, 2014 at 4:34 PM

Yes sir it really helped

Thanks a lot!!!

But sir can SPI & CPI be 2 or more or can it be negative?

And sir what will be the CPI & SPI to the same problem

If the same activity was to be completed in 20 days but it got

completed in 140 days
 Reply

Fahad Usmani says

August 24, 2014 at 2:08 PM

SPI and CPI depends on EV, PV and AC. These are ratios and
can not be negative.

Regarding your next doubt, you can analyse it with same logic.

Reply

Aseem says

August 24, 2014 at 10:58 PM

Thank you sirbut cal elaborate a little

Can SPI be 2?

And for the second question

Is SPI = 20/140 = 0.14

Acc to the logic?

Reply

Fahad Usmani says

August 25, 2014 at 9:25 AM

The logic says, SPI = EV/PV

Mathematically you can come with any number

and get the result.

Reply

18. Mohamad Gomaa says

September 12, 2014 at 3:22 PM

Hi,
When calculating SPI , you calculated PV as % complete * BAC ( 50 % in the
example as six months has passed from a one year duration project ) , but isn`t this
way may be deceiving sometimes ? as it assumes that the budget is divided equally
along the months of the project duration . Would it be more accurate to get the actual
 planned amount to date and use it as the PV ?
Regards

Reply

o Fahad Usmani says

September 12, 2014 at 6:18 PM

If the concept is clear, you can not be deceived. I took the simplest example to
make concept clear.

Reply

19. Mohamad Gomaa says

September 12, 2014 at 4:43 PM

another question please :

In calculating EV i use % complete in terms of quantity, ex. we have a planned
quantity of 1000 cubic meters of reinforced concrete to be finished in 8 months with
BAC of 6000000 , as to date we completed 100 cubic meters so the EV =
0.1(100/1000) * BAC
is this right and accurate ?
Regards

Reply

o Fahad Usmani says

September 12, 2014 at 6:24 PM

Let us use the simple mathematics.

The cost of 1000 cubic meter concreting is 6,000,000 USD.

This means cost of 1 cubic meter concreting will be = 6,000,000/1000

= 6,000 USD

Therefore, the cost of 100 cubic meter concreting = 100 *6,000

= 600,000 USD

Hope it helps.

Reply

20. Emilia says

October 9, 2014 at 11:12 PM

 Why can we use CPI to correctly forecast EAC, but cannot use SPI to correctly
forecast schedule at completion?

Reply

o Fahad Usmani says

October 12, 2014 at 10:12 AM

There is another term called To complete schedule performance index. I dont

understand that why the PMI has not included it in the PMBOK Guide.

Reply

21. Giannis says

October 10, 2014 at 6:53 AM

Hello and congratulations for your blog. How to calculate the SPI when an activity
start before schedule? I tried and i cant calculate it because the lower part of the
fraction (planned value) equals to zero. Thanks in advance.

Reply

o Fahad Usmani says

October 12, 2014 at 10:11 AM

You need to review the you schedule first.

To calculate the SPI you should have EV and PV on hand.

Reply

Giannis says

October 18, 2014 at 5:39 PM

I have already calculated EV and PV, but for example EV = 5000 and
PV = 0 because the task has begun ahead of schedule. Then its
impossible to calculate SPI for this condition.

Reply

Fahad Usmani says

October 19, 2014 at 7:30 AM

Yes.
 Reply

Satrajit says

December 17, 2015 at 1:21 PM

Incase you are ahead schedule, why would you calculate

SPI..You should party till next milestone arrives.

Reply

Fahad Usmani says

December 18, 2015 at 12:55 PM

If the difference is small, it is okay otherwise you must

find the cause for it.

Reply

22. Muhammad Anjum says

October 12, 2014 at 2:35 PM

Dear Fahad,

Here is an example;
BAC = 90 millions
Project Time = 9 months

After one month;

EV = 10% (i-e 9 millions)
AC = 10 millions &
PV = 13.5 millions

After calculation;
CPI = 0.90 (it means project is over budget) & EAC = 100 millions
SPI = 0.66 (it means project is behind schedule) & EAC = 136 millions

Now, my question is that how should I relate CPI & SPI with time duration of project
(i-e 9 months) ?

If, I devide time duration of project by SPI, it tells us estimated time duration of the
project is 13.6 months and in this case estimated cost would be 136 millions.

Is my approach is right or wrong ?

If No, please explain right approach, if Yes, then,
Can I also use CPI to calculate estimated time duration of the project ? And in this
case estimated cost would be relative cost ?
 Reply

o Fahad Usmani says

October 14, 2014 at 7:08 AM

You dont have to relate CPI with SPI.

These two are different parameters. CPI tells you about your cost performance
and SPI tells you about schedule performance.

Reply

Muhammad Anjum says

October 14, 2014 at 10:53 AM

Dear Fahad,
Thank you very much for your response.
Its OK, but my question was how to relate specially SPI with time
duration?
For example, SPI is 0.66, it means that we are behind schedule, but
how much we are behind in terms of time duration?
The approach I adopted is right or wrong? i-e devide project time
duration (9months) by SPI (0.66) and the estimated project time
duration would be 13.6 months.

Reply

23. Muhammad Anjum says

October 14, 2014 at 12:49 PM

Dear Fahad,
Thanks for your reply.
Actually, I want to ask that how to relate SPI with project time duration?
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?
If, I devide project time duration which is 9 months by SPI which is 0.66 then
estimated project time duration would be 13.6 months. Is this approach right or
wrong?

Reply

o Fahad Usmani says

October 15, 2014 at 7:20 AM

You can compare your actual progress with the planned progress (schedule
baseline). This comparison will show you that how much you are lagging.
 Reply

24. raghavendra mohare says

March 9, 2015 at 6:31 PM

I have a project where the CPI is 0.74 & SPI is 0.98. However the tracked MSP
schedule shows a variance(delay) of 45 days.

Can anybody comment whats wrong or what is the situation of project based on this.
The project duration is 1500 days & 365 days have passed.

Raghu

Reply

25. Lisa says

March 18, 2015 at 11:43 PM

Hi Fahad

Quick question. SPI is EV/PV; what about when change orders are added and your PV
suddenly changes? Some of the COs added are already complete by the time they are
added into the schedule; other times, the planned dates for change orders need to be
adjusted, otherwise the SPI does not seem to calculate properly. Any thoughts on this?

Thanks,
Lisa

Reply

o Fahad Usmani says

March 19, 2015 at 8:59 AM

Once any change request is approved, baselines will be updated, and you will
calculate the PV as per the current situation.

Reply

26. Anwar Kamal says

April 10, 2015 at 8:02 PM

Thanks for sharing knowledge here i just started here..shortly we will discuss a lot.
regards

Reply
 o Fahad Usmani says

April 12, 2015 at 8:48 AM

You are welcome Anwar.

Reply

27. vpt says

May 17, 2015 at 8:55 PM

Dear sir,
thanks for this nice article.
could you please tell me how the PV is calculated if project is delayed? As we
calculate as per the initial dates then PV exceeds the budget. Or do we need to make a
new baseline and then calculate the PV with respect to delayed date?
thanks,
vpt.

Reply

o Fahad Usmani says

May 21, 2015 at 7:35 AM

You will calculate the PV based on the current schedule. If you are behind the
schedule, can not recover it, you must change the schedule baseline.

Reply

28. Saad Ahmed says

July 8, 2015 at 10:14 PM

What does it mean if CPI is more than SPI?

Reply

o Fahad Usmani says

July 11, 2015 at 12:12 PM

You should compare apple to apple.

Reply

Saad says
 July 14, 2015 at 8:40 AM

What does mean by apple to apple

Reply

Fahad Usmani says

July 15, 2015 at 9:53 PM

SPI shows the schedule performance and CPI shows the cost
performance. You can not compare the SPI with CPI.

Reply

29. Reshma says

August 8, 2015 at 11:10 AM

Dear Farhad,

Thanks for your blogs. I have just started reading PMP material & this is really well
explained.

But i am completely confused with this eg., could be as i am just understanding

concepts. In the real world this scenario doesnt seem to be possible, at the same time
it also raises a question for me.

If i try to make this real, as an eg. i have to consider EV & CV as 20000 and PV as
80000. This means that i had considered 80% completion of work when actually only
20% has been completed. This is really bad but we say that having CPI > 1 means we
are on schedule. Arent these 2 scenarious completely contradictory. Here we are
saying that Cost spent is as per expectation but projection which has been done (PV)
is completely wrong. Thus how can CPI justify perfectness of project schedule or
even mean that cost is being spent as expected.

Please guide !!

Thanks and Regards,

Reshma

Reply

o Fahad Usmani says

August 10, 2015 at 2:17 PM

There is a difference between real world situation and virtual data. While
making a question, you may select any virtual data to check the analytic skill
of a candidate. You should not worry about it.
 Reply

30. CesarV says

October 4, 2015 at 6:11 PM

Hi Fahad,
I am going bananas trying to solve this problem I think I am over-complicating it.
Can you please advise?
If I have 4 tasks with several % completions and some AC and PV data can I use
those to calculate both the SPI and CPI?

A:100% complete. AC=3000, PV=2500

B:100% complete. AC=4000, PV=3000
C:85% complete. PV=6000
D:55% complete. PV=2000

Thanks for your help,

Cesar

Reply

31. Corina says

November 5, 2015 at 2:01 AM

Performance Index Method

These are the indexes I pull from one of our projects:

CPI / SPI / CSI

11.16 / 0.87 / 9.73

So, it means that we are under-budget and behind the schedule, correct?

Reply

o Fahad Usmani says

November 7, 2015 at 4:46 PM

Yes.

Reply

32. Brian says

November 23, 2015 at 1:56 AM

Hi Fahad;
Great post. Ive read it and will be reading the rest of them as well.
 You state that A consistently high or low value of SPI or CPI is an indication that
something is wrong with your planning and/or cost estimates. In this case, check all
assumptions and estimates for their correctness and take corrective action if needed.
I agree with your statement. I was wondering if you can suggest what you would
consider high. One of our contractors is claiming a CPI of 1.88. To me this is very
high and unreasonable. Im just wondering what your thoughts on the subject are?

Reply

o Fahad Usmani says

November 24, 2015 at 7:48 AM

Ideally it should be near to one, but around 1.1 can be acceptable and can be
bring under control.

No doubt 1.88 is tool high.

What is high or low, it is subjective discussion however as you move upward

things started getting worse.

Reply

33. Tayseer Sayyid says

December 5, 2015 at 7:05 PM

Is it possible for a project to have SPI > 1 and CPI >1 (assuming a scenario where the
project progress is slow, and the project is already running over budget)? What are the
mitigation measures?

Reply

o Fahad Usmani says

December 5, 2015 at 7:57 PM

It is possible. For the mitigation plan, you need to find the causes first and
then you will be able to correct it.

Reply

34. Frances says

December 18, 2015 at 12:51 AM

When I look at the formulas and the examples, it seems to assume that costs are
spread evenly throughout the project (eg. 3 consultants working from start to finish of
the project).
 but in fact most projects have costs varying from month to month. eg. there may be
purchase of software or equipment that spikes costs in certain months.

would these situations be accurately covered by EV, PV CPI etc?

Reply

o Fahad Usmani says

December 18, 2015 at 12:58 PM

In that you will see your schedule to find the value of PV, you have the AC,
and you can find the EV. Once you get these figure, you can run your analysis.

Reply

35. GHANDOUR says

December 24, 2015 at 4:51 PM

hello.
what we can do if SPI >1 ??
What do you propose to deal with this case?

thank you

Reply

o Fahad Usmani says

December 25, 2015 at 9:53 AM

If it is consistently too high, you will check your estimate.

Reply

36. shyama says

December 28, 2015 at 6:25 AM

1.. If CV is 1.02, wat does it means?

a) Its in on budget
b) Its within budget
c) It is over budget.

Reply

o Fahad Usmani says

December 31, 2015 at 1:41 PM

 Read below given blog post on cost variance and schedule variance.

http://pmstudycircle.com/2012/05/schedule-variance-sv-cost-variance-cv-in-
project-cost-management/

Reply

37. shyama says

December 31, 2015 at 4:31 PM

Hi Fahad Usmani,

Thanks for your reply.. However, for the above options, both options 1 and 2 seems to
be correct.

Could you pls let me know the correct answer.

Thanks

Reply

o Fahad Usmani says

January 4, 2016 at 2:16 PM

If the cost variance is positive, this means you are under budget. Option b is
the best answer.

Reply

38. Priya says

January 20, 2016 at 1:50 PM

Allen is managing a new product development project. The project estimates include
a total of 100 hours of development time. There are five separate tasks that will take
20 hours each. Each task has 4 subtasks that take 5 hours to complete. Allen hires
five programmers will each have twenty percent of the work that can be completed
concurrently. Each programmer will charge $100 per hour. Total budget for the
project is $10,000. Based on the distribution of work, it is determined that the
project can be completed within one week. Initial Reports At the end of the week,
the programmers turn in time sheets. A total of 90 hours is reported.
Bob worked 15 hours and 60% work is done.
Sue worked 25 hours and 75% work is done.
Roger worked 5 hours and 10% work is done.
Mike worked 30 hours and 50% work is done.
Jill worked for 15 hours and 80% work is done.
Find CPI, SPI, Health of Project.
 Reply

39. Priya says

January 20, 2016 at 2:57 PM

Question: Allen is managing a new product development project. The project

estimates include a total of 100 hours of development time. There are five separate
tasks that will take 20 hours each. Each task has 4 subtasks that take 5 hours to
complete. Allen hires five programmers will each have twenty percent of the work
that can be completed concurrently. Each programmer will charge $100 per hour.
Total budget for the project is $10,000. Based on the distribution of work, it is
determined that the project can be completed within one week. Initial Reports At the
end of the week, the programmers turn in time sheets. A total of 90 hours is reported.
Find CPI, SPI

Answer:
Budget=$10,000 for 100 hours
PV @90Hours= 0.910000 = $9,000
AC=$9,000 for 90 hours
Each Work Component budget (considering 5 workers) = $10,000/5= $2,000
EV for Bobs Account: 0.62,000=$1,200
EV for Sues Account: 0.752,000=$1,500
EV for Rogers Account: 0.12,000=$200
EV for Mikes Account: 0.52,000=$1,000
EV for Jills Account: 0.82,000=$1,600
TOTAL Earned Value = $5,500 (addition of PV of all 5 workers)

SV=EV-PV; i.e. $5500-$9000= $-3,500,

SPI=EV/PV; i.e. 5500/9000=0.6

Reply

40. Priya says

January 20, 2016 at 3:01 PM

some information did not appear:

IF
Bobs Account: 60% work done after 15 hours
Sues Account: 75% work done after 25 hours
Rogers Account: 10% work done after 5 hours
Mikes Account: 50% work done after 30 hours
Jills Account: 80% work done after 15 hours

Reply

41. Chad Williams says

March 16, 2016 at 6:04 PM

 Hello,

If you have a project that is complete and the CPI=1 and the SPI=237 on an expedited
project is this a valid way to represent that the project completed significantly ahead
of schedule?

Reply

o Fahad Usmani says

March 17, 2016 at 8:13 AM

Are you sure that SPI = 237?

If SPI = 2 this means you have completed the project in half time.

Reply

42. Tim says

May 19, 2016 at 6:30 AM

Hi Fahad,

Before you make any progress against either the CPI or SPI, meaning you have
started that scope of work yet, I assume you should set the CPI or SPI to 1, correct?

ie: If CPI = EV/AC, and EV and AC = 0, should we set CPI to 1 which forecasts
everything in that part of the scope as on budget?

Reply

o Fahad Usmani says

May 22, 2016 at 7:27 AM

If PV=AC=EV meaning you are on schedule and on budget. If AC is zero

means you did not spend a single penny on it.

Reply

43. Bernard says

June 1, 2016 at 8:00 AM

Which of the following ideal at the end of a project; a. AC=EV. b. EV=PV. c. AC=PV.
d. CPI=1

Reply
 o Fahad Usmani says

June 4, 2016 at 11:58 AM

At the end of the project you will earn all planned value, so as per my
understanding EV = PV will be the right answer.

Reply

44. Elina says

July 1, 2016 at 8:24 PM

Hi Fahad.

I would like you to explain this.

What impact would there be on PV, AC, EV, CV and SV if there are early start of
activity OR late start of activity?

Hope you can explain the impacts!

Thanks!

Reply

o Fahad Usmani says

July 2, 2016 at 10:10 AM

From the information given in your question I can say that:

If the activity is on critical path, and it is delayed, the project will delay.
However it is finishing earlier, the project will finish earlier. Also watch for
other paths in your network.

If the activity is on non-critical path, it does not matter if it delays until all
float is consumed. After that the project will start delaying.

Reply