Project Management Earned Value Management (EVM) 4 — Questions and Answers
Question 1: A project's SPI is 0.72 and the deadline is fixed. What action is most aligned with EVM principles?
- Analyze critical path activities and consider crashing or fast-tracking (Correct answer)
- Increase the budget to compensate for schedule slippage
- Recalculate PV to match current EV
- Report the SPI as acceptable since it exceeds 0.5
Correct answer: Analyze critical path activities and consider crashing or fast-tracking
An SPI of 0.72 signals significant schedule slippage; crashing or fast-tracking are standard recovery techniques for a fixed deadline.
Question 2: What does EVM require that traditional cost accounting alone does NOT provide?
- Integration of scope, schedule, and cost into a single performance measurement (Correct answer)
- Tracking of actual expenditures against invoices
- Identification of individual resource costs
- Monthly variance reporting to stakeholders
Correct answer: Integration of scope, schedule, and cost into a single performance measurement
EVM uniquely integrates scope, schedule, and cost, enabling objective performance measurement that traditional cost tracking cannot provide.
Question 3: A control account in EVM is best described as:
- A management control point where scope, budget, and schedule are integrated for performance measurement (Correct answer)
- A financial account that holds project contingency reserves
- A summary-level budget for the entire project
- An account used to track vendor invoices
Correct answer: A management control point where scope, budget, and schedule are integrated for performance measurement
Control accounts are the primary EVM management points where scope, schedule, and cost baselines converge for performance tracking.
Question 4: If TCPI (calculated against EAC) is less than 1.0, what does this indicate?
- The project can afford to be less efficient on remaining work and still meet the EAC (Correct answer)
- The project must be more efficient on remaining work to meet the EAC
- The project will definitely finish under budget
- The project's EAC is lower than the BAC
Correct answer: The project can afford to be less efficient on remaining work and still meet the EAC
TCPI < 1.0 means the required future efficiency is less demanding than historical performance, making the EAC goal achievable.
Question 5: A project uses the 50/50 rule for earned value. A $20,000 task has just started. How much EV is credited?
- $10,000 (Correct answer)
- $0
- $20,000
- $5,000
Correct answer: $10,000
The 50/50 rule credits 50% of the budget when work starts and the remaining 50% when work is complete, so $10,000 is credited at start.
Question 6: Which statement about EVM's Schedule Performance Index (SPI) is TRUE near project completion?
- SPI becomes less meaningful near completion because EV approaches PV regardless of remaining work (Correct answer)
- SPI becomes more accurate as it incorporates actual finish dates
- SPI always equals 1.0 at project completion regardless of performance
- SPI is most useful during the final 10% of the project
Correct answer: SPI becomes less meaningful near completion because EV approaches PV regardless of remaining work
Near completion, EV converges toward the BAC (= PV at end), causing SPI to trend toward 1.0 even on late projects, masking real schedule status.
Question 7: A program manager oversees three projects. Project A has CPI=1.1, Project B has CPI=0.88, Project C has CPI=0.95. Which project should receive priority attention?
- Project B, because it has the lowest CPI indicating the worst cost performance (Correct answer)
- Project A, because it is performing best and may have slack resources
- Project C, because it is closest to 1.0 and most at risk of crossing the threshold
- All three equally, as none has achieved a CPI of 1.0
Correct answer: Project B, because it has the lowest CPI indicating the worst cost performance
Project B's CPI of 0.88 indicates the greatest cost overrun relative to work accomplished and therefore requires the most immediate corrective action.
Project Management Earned Value Management (EVM) 4
A project's SPI is 0.72 and the deadline is fixed.
What action is most aligned with EVM principles?