CAPM CAPM Cost & Schedule Management 1 — Questions and Answers
Question 1: In Earned Value Management, what does the Schedule Performance Index (SPI) indicate when it is greater than 1.0?
- The project is over budget
- The project is ahead of schedule (Correct answer)
- The project is behind schedule
- The project has completed more work than planned
Correct answer: The project is ahead of schedule
An SPI greater than 1.0 means the project is ahead of schedule, as more earned value has been generated than the planned value for that period.
Question 2: Which cost estimate is typically the most accurate and is prepared from detailed engineering documents and specifications?
- Rough order of magnitude (ROM) estimate
- Analogous estimate
- Parametric estimate
- Definitive (bottom-up) estimate (Correct answer)
Correct answer: Definitive (bottom-up) estimate
A definitive or bottom-up estimate is the most accurate type, built from detailed WBS components and engineering data, typically with a ±5–10% accuracy range.
Question 3: What is the critical path in a project schedule network?
- The sequence of activities with the most resources assigned
- The longest path through the network that determines the project duration (Correct answer)
- The path with the highest risk activities
- The path with the most tasks completed on time
Correct answer: The longest path through the network that determines the project duration
The critical path is the longest sequence of dependent activities through the network diagram, and it determines the minimum possible project duration.
Question 4: A project has a Cost Performance Index (CPI) of 0.8. What does this indicate?
- The project is 80% complete
- For every $1 spent, only $0.80 of value is being produced (Correct answer)
- The project will finish 20% under budget
- The project has consumed 80% of its budget
Correct answer: For every $1 spent, only $0.80 of value is being produced
A CPI of 0.8 means the project is over budget—for every dollar spent, only 80 cents worth of planned work has been accomplished.
Question 5: What is 'float' (also called slack) in project scheduling?
- The amount of budget held in reserve
- The amount of time an activity can be delayed without delaying the project end date (Correct answer)
- The number of resources available for reassignment
- Extra scope added as a buffer for schedule risk
Correct answer: The amount of time an activity can be delayed without delaying the project end date
Float (or slack) is the amount of time an activity can be delayed without delaying the project finish date or a successor activity's early start.
Question 6: Which scheduling technique involves compressing the schedule by adding resources to critical path activities to finish them faster?
- Fast tracking
- Crashing (Correct answer)
- Resource leveling
- Schedule compression
Correct answer: Crashing
Crashing adds resources (people, equipment, overtime) to critical path activities to shorten their duration, typically increasing cost.
CAPM CAPM Cost & Schedule Management 1
In Earned Value Management, what does the Schedule Performance Index (SPI) indicate when it is greater than 1.0?