I'm struggling with an exam prep/sample test question about SPI. I understand the formula but I am not sure how I was supposed to know to calculate the PV based on this question: 4 out of 10 buildings are complete. Budget =$100,000. AC= $250,000. We're 3 months into the total schedule of 6 months. How was I supposed to know that the planned value was 5 buildings? The answer stated that the planned value was (5/10)*100,000. Was I supposed to assume that 5 buildings were going to be built at halfway mark of the schedule? I got the EV correct but could not get the PV. I thought that we couldn't assume any information about the question on the exam. Thank you! Saving Changes...
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Phil AkinwaleProject Management & Leadership Speaker, Coach, Trainer & Author| PRAIZIONMesa, Az, United States
Your assumptions are likely correct. The question could have been written better. If they had mentioned each building is of equal value it may have helped.
Where there is little information given, you do need to make your own assumptions to solve it.
The total Schedule is 6 months. If you are 3 months in, then you are 50% of the schedule in and you can also assume 50% of the work should have been done.
PV = BAC x % Planned Completion = 100K x %50 = $50K
SPI has nothing to do with AC so that is a red-herring.
Each house is valued at $10K
If 4/10 are done, EV = $40K
SPI = EV/PV = 0.8
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2 replies by Victoria Revay and Wilson Jaime
Jul 03, 2023 10:46 AM
Victoria Revay
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Thank you!
Jul 04, 2023 11:08 AM
Wilson Jaime
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To calculate the Planned Value (PV) based on the given information, it is necessary to assume that the PV is equal to the budgeted value for the construction of the buildings that should have been completed by the current time. As the question states that 4 out of 10 buildings are complete, we can infer that the PV for the construction of those 4 buildings is equal to $100,000, which is the total budgeted value. Therefore, the PV for the construction of the remaining 5 buildings is equal to (5/10)$100,000, which is $50,000. This means that the total PV for the construction of the 10 buildings is $100,000 + $50,000, which is $150,000. The PV represents the value that should have been spent up to the current time, which is 3 months into the total schedule of 6 months. Therefore, the PV for the project up to the current time is (3/6)$150,000, which is $75,000.
Your assumptions are likely correct. The question could have been written better. If they had mentioned each building is of equal value it may have helped.
Where there is little information given, you do need to make your own assumptions to solve it.
The total Schedule is 6 months. If you are 3 months in, then you are 50% of the schedule in and you can also assume 50% of the work should have been done.
PV = BAC x % Planned Completion = 100K x %50 = $50K
SPI has nothing to do with AC so that is a red-herring.
Each house is valued at $10K
If 4/10 are done, EV = $40K
SPI = EV/PV = 0.8
Senior Projects Manager | Field & Marten AssociatesNew Westminster, British Columbia, Canada
Victoria, I agree with Phil. Sometimes you need to make logical assumptions and those assumptions makes sense. If you were not given any info, then you assume that each building is equal in terms of budget. Saving Changes...
I agree with Phil.
*BAC = 100.000
*Building number: 10 (You assume that all the houses have identical characteristics)
*Value of each building: 100000/10 = 10000
*If three months have passed (of a total of 6 months that have been scheduled for the project), then, it's planned that half of the buildings should be finished. So, the PV at this time is: 10000*5 = 50000 Saving Changes...
Unfortunately this is another example of a low quality practice question. The real exam questions won't have that sort of ambiguity to avoid causing unnecessary confusion to test takers.
Could you share which practice exam site you were on?
It's well said that some questions requires a logical assumption to be made.
I'd always try to make it simple and straightforward, not to overcomplicate the case. At the end there is above 1 minute per question.
In this question there are 2 assumptions needed:
1) Each building has same value
2) Planned value is 5 buildings (following logic that in 50% of time given we should have 50% of work done) Saving Changes...
Your assumptions are likely correct. The question could have been written better. If they had mentioned each building is of equal value it may have helped.
Where there is little information given, you do need to make your own assumptions to solve it.
The total Schedule is 6 months. If you are 3 months in, then you are 50% of the schedule in and you can also assume 50% of the work should have been done.
PV = BAC x % Planned Completion = 100K x %50 = $50K
SPI has nothing to do with AC so that is a red-herring.
Each house is valued at $10K
If 4/10 are done, EV = $40K
SPI = EV/PV = 0.8
To calculate the Planned Value (PV) based on the given information, it is necessary to assume that the PV is equal to the budgeted value for the construction of the buildings that should have been completed by the current time. As the question states that 4 out of 10 buildings are complete, we can infer that the PV for the construction of those 4 buildings is equal to $100,000, which is the total budgeted value. Therefore, the PV for the construction of the remaining 5 buildings is equal to (5/10)$100,000, which is $50,000. This means that the total PV for the construction of the 10 buildings is $100,000 + $50,000, which is $150,000. The PV represents the value that should have been spent up to the current time, which is 3 months into the total schedule of 6 months. Therefore, the PV for the project up to the current time is (3/6)$150,000, which is $75,000. Saving Changes...
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