Mock Tech Numerical

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komal
Participant Posts: 73
Joined: Wed May 31, 2017 4:34 pm

Mock Tech Numerical

Your project has a budget at completion as \$80,000. You want to find out that performance of your project is going ok. You know that \$50,000 already spent on the work which is 70% done. With the same rate of expenditures, what’s the lowest that you can allow your CPI to go before you’ve exceeded your project’s budget?

Manish/Saket

In this question, what is asked to calculate?
nazrulq
Contributor Posts: 271
Joined: Sun Feb 26, 2017 6:06 am

Re: Mock Tech Numerical

The question is asking for to find out To Complete Performance Index (TCPI) . If the full solution is required. Complete solution
can be provided!
maverick
Posts: 5
Joined: Wed Aug 02, 2017 11:41 am

Re: Mock Tech Numerical

It goes something like this -

BAC = \$80,000
AC = \$50,000
EV = 70% of \$80,000 = \$56,000

Therefore, CPI = EV/AC = 1.12. This indicates that you are performing under budget, hence the formula to be used for TCPI will be:

TCPI = (Work Remaining)/ (Funds Remaining) = (BAC-EV)/(BAC-AC) = 0.8 in this case.

As such, you need to continue with a Cost Performance Index of 0.80 to complete the project, which is a favorable condition.

Keep in mind, that had we been performing over budget, the formula for TCPI would have been

TCPI = (BAC-EV)/ (EAC-AC), and

EAC could have been calculated as BAC/CPI

Hope that clarifies.

Thanks,

Sheshir
nazrulq
Contributor Posts: 271
Joined: Sun Feb 26, 2017 6:06 am

Re: Mock Tech Numerical

When project performance shows over budget then a new EAC should be calculated .
At that time TCPI should be

TCPI = BAC-EV/( EAC-AC) but since it is under budget then CPI <1
TCPI = BAC-EV/( BAC-AC) might be used . CPI>1

Hopefully it clarifies!