You are the project manager of the NHQ Project. This project has a Budget at Completion of
$750,000 and is expected to take 18 months to complete. The project is supposed to be 75
percent complete, but due to some errors the project is only 60 percent complete. At this time the
project has spent $465,500. Management has asked you to review the project work and report the
project’s SPI. What is the SPI for this project?

A.
0.97

B.
0.80

C.
$562,500

D.
-$112,500

Explanation:
The project’s schedule performance index (SPI) can be found by using the formula; earned
value/planned value. The earned value is the percent of the project completed times the BAC. The
planned value is the percentage of where the project should be times the budget at completion. In
this instance, the formula reads: $450,000/562500 = 0.80. Schedule performance index (SPI) is
the measure of schedule efficiency on a project. It is used in trend analysis to predict future
performance. SPI is the ratio of earned value to planned value. The SPI is calculated based on the
following formula: SPI = Earned Value (EV) / Planned Value (PV) If the SPI value is greater than
1, it indicates better than expected performance, whereas if the value is less than 1, it shows poor
performance. The SPI value of 1 indicates that the project is right on target.
Answer option A is incorrect. This value is the project’s Cost Performance Index (CPI).
Answer option D is incorrect. This value is the schedule variance for the project.
Answer option C is incorrect. $562,500 is the planned value for the project.