A two-year project with a budget of US$2 million has completed about 60% of the work at the end of the first year. The actual cost incurred to complete the remaining 40% of work is about US$1.5 million. As a part of performing a specialized risk analysis, the calculated schedule performance index (SPI) is 1.2 and cost performance index (CPI) is 0.53.
How should the risk manager interpret such a low CPI value?
A low Cost Performance Index (CPI) value of 0.53 indicates that the project is over budget—meaning that for every dollar spent, only 53 cents worth of work is being completed. This suggests that the cost control processes are ineffective, and the project is experiencing cost inefficiencies.
The CPI is less than 1 which means that the cost risk management is not effective and the project is running over budget
Think the same
CPI less than 1 means poor cost control and over spending. Thus its A