Please Assist with Question Explanation

Discussion in 'PMP' started by Sajid Amin, Sep 16, 2020.

  1. Sajid Amin

    Sajid Amin Active Member

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    Can someone please explain how D is the correct answer here? D has the highest CPI so why would that require immediate attention?

    Which activities deserve your immediate attention the most?

    SELECT THE CORRECT ANSWER

    AC=3000 EV=2900
    PV=3000 EV=2900
    AC=3000 EV=3200
    EV=3000 AC=2400
    Correct Option:D

    EXPLANATION

    Option a : AC=3000, EV=2900 : Looking at only these two values and assuming all others are as planned, work done is less and money spent is more, but is nominally more. Option b : PV=3000, EV=2900 : Looking at only these two values and assuming all others are as planned, work planned is nominally higher than work completed. Option c : AC=3000, EV=3200 : Looking at only these two values and assuming all others are as planned, work done is more and money spent is less. Option d : AC=2400, EV=3000 : Looking at only these two values and assuming all others are as planned, again work done is more and money spent is less. Compare CPI of options 'c' and 'd', which are CPI=1.06 and CPI=1.25 respectively. Since the CPI for option 'd' is higher, it is the correct answer.
     
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  2. tim jerome

    tim jerome Well-Known Member
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    We read "highest CPI" and interpret it as "highest NEGATIVE CPI". This question slays me every time it comes up.

    Have you ever lost an invoice on your desk or behind the filing cabinet? It's a bad feeling, and is represented as a cost savings in your EVA. Sometimes just the Big numbers are the important ones.
     
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  3. MAHESH TANAJI SANKPAL

    MAHESH TANAJI SANKPAL Active Member

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    I feel that the answer has to be either A or B but I am not able to decide which one.
    As a PM I would be giving attention to activities that are either behind schedule or over budget.
    A higher CPI means that we are earning more per every dollar spent which is a good thing so either C or D cannot be the answer.

    Please correct my understanding if required.

    AC=3000 EV=2900 => Over Budget
    PV=3000 EV=2900 => Behind Schedule

    AC=3000 EV=3200 => Under Budget
    AC=2400 EV=3000 => Under Budget
     
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    Last edited: Sep 17, 2020
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  4. Sajid Amin

    Sajid Amin Active Member

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    @tim jerome , do you agree Sir?
     
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  5. tim jerome

    tim jerome Well-Known Member
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    Please read my response above. Just because the the CPI is positive, doesn't mean I'm observing a happy event. Its variance begs us to pay attention to it.

    A positive CPI is great, right? For this problem, it could mean that I missed a payment, and I'm sitting on extra money that I should have handed to a client. This is poor control on my part.

    To take this concept outside the context of our question, consider this -
    If I had a huge under budget situation, could it because I allowed for a gross over-estimation in planning? certainly. Those funds, as well, could have been set aside for another investment, possibly better than this one. Not only have I mis-estimated for my project, but I impacted potential growth for my organization.

    What does the data and context read in this question? What's the real question? What are the four options and their variances? Some results, on the exams and in real life are not such clear and decipherable messages.
     
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  6. Sajid Amin

    Sajid Amin Active Member

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    Thank you for the explanation.
     
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