CPI/SPI Consideration

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sachin07
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Posts: 67
Joined: Tue Jul 28, 2015 5:47 pm

CPI/SPI Consideration

Postby sachin07 Thu Sep 03, 2015 3:06 pm

Hi All,

My question is : Why do we need to use both SPI and CPI in the below case as per the justification provided for answer. Although it is saying that exceeded cost are due to bad cost estimations. What is the key word which i didn't catch ? Can someone please guide me on this?


Your project exceeded costs in the past caused by an underestimation of
resource costs in the cost baseline:
PV: $1,200,000, EV: $1,000,000, AC: $1,200,000
You expect the underestimation to influence the future as much as it did in the
past.
If the value of the remaining work (BAC – EV) is at $1,000,000, what should be
your new EAC (estimate at completion)?108
o $1,800,000
o $2,000,000
o $2,200,000
o $2,400,000

regards
Sachin
abhimukh19
Posts: 4
Joined: Wed Sep 02, 2015 6:44 am

Re: CPI/SPI Consideration

Postby abhimukh19 Thu Sep 03, 2015 4:15 pm

sachin07 wrote:Hi All,

My question is : Why do we need to use both SPI and CPI in the below case as per the justification provided for answer. Although it is saying that exceeded cost are due to bad cost estimations. What is the key word which i didn't catch ? Can someone please guide me on this?


Your project exceeded costs in the past caused by an underestimation of
resource costs in the cost baseline:
PV: $1,200,000, EV: $1,000,000, AC: $1,200,000
You expect the underestimation to influence the future as much as it did in the
past.
If the value of the remaining work (BAC – EV) is at $1,000,000, what should be
your new EAC (estimate at completion)?108
o $1,800,000
o $2,000,000
o $2,200,000
o $2,400,000

regards
Sachin



Clearly a BAC/CPI case as the variances are typical. Don't go by the explanations always :)
coolpmp69
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Posts: 282
Joined: Mon Nov 17, 2014 8:55 pm

Re: CPI/SPI Consideration

Postby coolpmp69 Thu Sep 03, 2015 9:20 pm

This line from the question " You expect the underestimation to influence the future as much as it did in the past." should give you a hint to use BAC/CPI formula. This means that your are performing at the same CPI rate in future as you did in the past.
AM1969
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Posts: 194
Joined: Fri Dec 05, 2014 7:05 pm

Re: CPI/SPI Consideration

Postby AM1969 Thu Sep 03, 2015 10:06 pm

Option D should be the answer.

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