You work as a Project Manager for Tech Perfect Inc. Several projects are running under your supervision. Martha, a team leader of a project, informs you about the performance indexes of her project. The schedule performance index (SPI) of her project is 0.835.
What does this figure indicate?

A.
The schedule performance is better than expected.

B.
The schedule performance is below expectation.

C.
The cost performance is better than expected.

D.
The schedule performance is right on target.

Explanation:
According to the question, the SPI of Martha’s project is 0.835. This figure is less than 1. Hence, it shows that the schedule performance is below expectation. What is SPI? 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 options A and D are incorrect. An SPI value of 1 or above indicates that the schedule performance is either right on target or better than expected. Answer option C is incorrect. SPI has nothing to do with cost performance.