Hopefully you’ve been following our series on PMP Exam calculations.
If you have, you’ll know that one of the areas that people often struggle with when studying for the PMP is the calculations involved with the Cost Management knowledge area.
This post is about how to calculate Schedule Performance Index. Otherwise known as SPI.
Schedule Performance Index is used to show whether a project is behind or ahead of schedule.
In other words, the Schedule Performance Index shows whether your project will deliver late, on time or early.
Schedule Performance Index Formula
The Schedule Performance Index is calculated as follows:
Schedule Performance Index = Earned Value / Planned Value
Tip – Earned Value is also known as Budgeted Cost of Work Performed (BCWP). Planned Value is also known as Budgeted Cost of Work Scheduled (BCWS).
So you may see the formula written as:
Schedule Variance = BCWP / BCWS
Schedule Variance = EV / BCWS
Schedule Variance = BCWP / PV
What does SPI mean?
The result of the Schedule Performance Index formula is a number. So what does this number mean?
A value of less than one means that the project is potentially behind schedule. So if your SPI is 0.8, the project will not finish on time.
An SPI of one means that your project will be finish exactly when the plan predicts.
And a value of greater than one means that the project will be completed early. So if your SPI is 1.2, the project will be completed sooner than the plan predicts.
Schedule Performance Index answers the question “When will the project be completed?”.
Example of Calculating Schedule Performance Index
Lets see an example.
Frank is the project manager for a software development company based in London. He is managing a project to create a new mobile photo sharing app. The estimated value of the work completed by the project so far is $116,000. The planned value of the project is $125,000.
What is the Schedule Performance Index? And what does this tell us about Frank’s project?
Answer: The Schedule Performance Index is 0.93. This means that Frank’s project is behind schedule.
How did we calculate this?
Well we know that Schedule Performance Index = Earned Value / Planned Value.
The Earned Value is $116,000.
Tip – the PMP exam may use slightly different descriptions to describe the input to a formula. This is to test your knowledge and make sure you understand what you are calculating. EG “estimated value of the work completed by the project so far” is another way of saying Earned Value.
The Planned Value is $125,000.
Knowing this we can calculate:
Schedule Performance Index= $116,000 / $125,000 = 0.93
That wasn’t too hard to calculate, right?
Next in the PMP Exam calculation series is Estimate At Completion (EAC).
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