EVM EVM Variance Analysis and Interpretation 2

Question 1

What does a Cost Performance Index (CPI) of 0.85 indicate?

Accepted Answer

The project is delivering only $0.85 of value for every dollar spent

Answer

The project is delivering $1.15 of value for every dollar spent

Answer

The project is 85% complete

Answer

The project is 15% ahead of schedule

Question 2

What is the primary purpose of establishing variance thresholds in an EVM system?

Accepted Answer

To trigger management attention only when deviations are significant

Answer

To eliminate all variances from the project

Answer

To automatically extend the project schedule when costs rise

Answer

To reduce the project budget automatically when performance is good

Question 3

Which EVM performance metric is generally considered most stable and reliable for forecasting after a project reaches 20% completion?

Accepted Answer

Cost Performance Index (CPI)

Answer

Schedule Variance (SV)

Answer

Schedule Performance Index (SPI)

Answer

Variance at Completion (VAC)

Question 4

What does a negative Variance at Completion (VAC) indicate at the time of reporting?

Accepted Answer

The project is predicted to overrun its budget at completion

Answer

The project will finish ahead of schedule

Answer

The project will come in under its original budget

Answer

The project has earned more value than planned

Question 5

In EVM reporting, what is 'management by exception'?

Accepted Answer

Focusing management attention only on significant deviations from the baseline

Answer

Reporting all variances regardless of their size

Answer

Exempting senior managers from reviewing EVM reports

Answer

Eliminating small variances by adjusting the performance baseline

Question 6

An SPI of 1.0 means what for a project's schedule status?

Accepted Answer

The project is progressing exactly as planned

Answer

The project is over budget

Answer

The project is behind schedule

Answer

The project will complete significantly early

Question 7

What does analyzing EVM variance trends over multiple reporting periods help project managers identify?

Accepted Answer

Whether performance problems are improving, worsening, or remaining stable

Answer

The total project budget remaining

Answer

The names of individual underperforming team members

Answer

The mathematically precise final completion date