PCC Performance Measurement & KPIs 3 — Questions and Answers
Question 1: In a project control context, what is the primary purpose of a Variance at Completion (VAC)?
- To measure the current cost efficiency of the project
- To project the expected cost overrun or underrun at project completion (Correct answer)
- To determine the remaining budget available for future work
- To calculate the schedule delay in monetary terms
Correct answer: To project the expected cost overrun or underrun at project completion
VAC = BAC - EAC and forecasts whether the project will finish over or under the original budget.
Question 2: A project has SPI = 0.85 and CPI = 0.90. Using the composite EAC formula EAC = BAC / (CPI × SPI), which situation is the project MOST likely facing?
- Ahead of schedule and under budget
- Behind schedule and over budget (Correct answer)
- On schedule but over budget
- Behind schedule but under budget
Correct answer: Behind schedule and over budget
SPI < 1.0 indicates behind schedule and CPI < 1.0 indicates over budget, so the composite EAC reflects both negative performance trends.
Question 3: Which KPI is most useful for forecasting the final cost of a project when current performance trends are expected to continue?
- Estimate to Complete (ETC)
- EAC = AC + (BAC - EV) / CPI
- EAC = BAC / CPI (Correct answer)
- Planned Value (PV)
Correct answer: EAC = BAC / CPI
EAC = BAC / CPI assumes that the current cost efficiency will persist for all remaining work, making it the standard forecast when trends are expected to continue.
Question 4: A Control Account Manager (CAM) reports a Cost Variance (CV) of -$50,000. What does this mean?
- The project has earned $50,000 more than planned
- The project has spent $50,000 more than the value of work accomplished (Correct answer)
- The project is $50,000 ahead of schedule
- The project saved $50,000 compared to the baseline
Correct answer: The project has spent $50,000 more than the value of work accomplished
CV = EV - AC; a negative CV means actual costs exceed the earned value, indicating a cost overrun.
Question 5: Which of the following describes an Integrated Baseline Review (IBR)?
- A quarterly audit of all project invoices
- A formal review to verify the PMB is realistic, traceable, and executable (Correct answer)
- A scope change review process
- An assessment of contractor past performance
Correct answer: A formal review to verify the PMB is realistic, traceable, and executable
An IBR is a government-mandated or best-practice review that validates the PMB for technical, schedule, and resource realism.
Question 6: A project control system that meets ANSI/EIA-748 standards must have how many criteria organized across five process groups?
- 25 criteria
- 32 criteria (Correct answer)
- 18 criteria
- 10 criteria
Correct answer: 32 criteria
ANSI/EIA-748 defines 32 criteria across Organization, Planning, Accounting, Analysis, and Revisions process groups for EVMS compliance.
Question 7: What is the significance of a CPI that 'stabilizes' after the 20% completion point of a project?
- The project is guaranteed to finish under budget
- The CPI becomes a reliable predictor of final cost performance (Correct answer)
- Schedule recovery becomes impossible
- The project must be terminated if CPI < 0.90
Correct answer: The CPI becomes a reliable predictor of final cost performance
Research shows that after 20% completion, the cumulative CPI rarely improves by more than 10%, making it a reliable leading indicator of final cost.
PCC Performance Measurement & KPIs 3
In a project control context, what is the primary purpose of a Variance at Completion (VAC)?