The core of this question lies in understanding how to interpret deviations from planned performance and their implications for future project execution, specifically within the framework of ISO 21508:2018. The scenario describes a project where the Schedule Performance Index (SPI) is \(0.85\) and the Cost Performance Index (CPI) is \(1.15\).

The SPI of \(0.85\) indicates that the project is progressing at \(85\%\) of the rate originally planned. For every unit of time spent, only \(0.85\) units of planned work have been completed. This signifies a schedule slippage.

The CPI of \(1.15\) indicates that the project is achieving \(115\%\) of the planned value for the work performed. For every unit of currency spent, \(1.15\) units of planned value have been earned. This signifies that the project is under budget for the work completed so far.

When considering the implications for future work, a project manager must analyze these combined indicators. A schedule delay (low SPI) coupled with cost efficiency (high CPI) suggests that while the project is spending less than planned for the work done, it is also completing less work than planned within the given timeframe. This situation requires careful consideration of resource allocation and potential schedule recovery strategies.

The most appropriate response is to acknowledge the schedule delay and the cost savings, and then focus on the need to re-evaluate the remaining work and the project timeline. The project is behind schedule, and while it is currently cost-effective, this cost-effectiveness might be due to slower progress, which could eventually impact overall cost if not managed. Therefore, the focus should be on understanding the root causes of the schedule delay and implementing corrective actions to bring the project back on track, or at least to mitigate further slippage, while continuing to monitor costs. This involves a proactive approach to managing the remaining scope and schedule.

The scenario describes a project where the Planned Value (PV) for a completed phase is $150,000, the Earned Value (EV) achieved is $135,000, and the Actual Cost (AC) incurred is $140,000. The question asks about the implications of these figures for project performance.

First, let’s calculate the Schedule Variance (SV) and Cost Variance (CV).
SV = EV – PV
SV = $135,000 – $150,000 = -$15,000

CV = EV – AC
CV = $135,000 – $140,000 = -$5,000

The Schedule Variance (SV) is negative (-$15,000), indicating that the project is behind schedule. The Earned Value is less than the Planned Value, meaning less work has been accomplished than planned for the time elapsed.

The Cost Variance (CV) is also negative (-$5,000), indicating that the project is over budget. The Actual Cost incurred is greater than the Earned Value, meaning more money was spent than the value of the work completed.

The Schedule Performance Index (SPI) is calculated as EV/PV.
SPI = $135,000 / $150,000 = 0.90

An SPI of 0.90 suggests that for every dollar’s worth of work planned, only $0.90 worth of work has been completed, confirming the project is behind schedule.

The Cost Performance Index (CPI) is calculated as EV/AC.
CPI = $135,000 / $140,000 = 0.964 (approximately)

A CPI of approximately 0.964 indicates that for every dollar spent, only $0.964 worth of value has been earned, confirming the project is over budget.

Therefore, the project is both behind schedule and over budget. The negative SV and CV, along with SPI < 1 and CPI < 1, all support this conclusion. The explanation focuses on interpreting these variances and indices to understand the project's current performance status, which is a core concept in ISO 21508. It highlights that a negative schedule variance signifies being behind schedule, and a negative cost variance signifies being over budget, with the respective performance indices providing a ratio of efficiency.

The core of this question lies in understanding the implications of a project’s performance against its baseline, specifically when the Schedule Performance Index (SPI) is less than 1 and the Cost Performance Index (CPI) is also less than 1. A CPI < 1 signifies that the project is over budget for the work performed, meaning more cost has been incurred than the value earned. An SPI < 1 indicates that the project is behind schedule, meaning less work has been completed than planned for the time elapsed. When both these indices are below 1, it points to a project experiencing both cost overruns and schedule delays. The Earned Value (EV) represents the value of the work completed, the Planned Value (PV) represents the value of the work scheduled to be completed, and the Actual Cost (AC) represents the cost incurred for the work performed.

If \( \text{CPI} = \frac{\text{EV}}{\text{AC}} < 1 \) and \( \text{SPI} = \frac{\text{EV}}{\text{PV}} < 1 \), then it follows that \( \text{EV} < \text{AC} \) and \( \text{EV} < \text{PV} \). This directly implies that the project has spent more money than the value of the work completed (cost overrun) and has completed less work than was planned for the elapsed time (schedule delay). Therefore, the project is both over budget and behind schedule. The correct response must accurately reflect this dual performance issue. The explanation of the correct option will detail how these indices are calculated and what their values signify in terms of project status, emphasizing that a CPI below unity indicates cost inefficiency and an SPI below unity indicates schedule inefficiency.

The core of this question lies in understanding how to interpret performance trends when the Planned Value (PV) and Earned Value (EV) are equal, but the Actual Cost (AC) is higher than the budgeted cost for the work performed. In such a scenario, the project is on schedule in terms of work completed relative to the plan (since EV = PV). However, the project is over budget for the work accomplished. The Cost Performance Index (CPI) is calculated as \( \text{CPI} = \frac{\text{EV}}{\text{AC}} \). If \( \text{EV} = \text{PV} \) and \( \text{AC} > \text{PV} \), then \( \text{AC} > \text{EV} \). Consequently, \( \text{CPI} = \frac{\text{EV}}{\text{AC}} < 1 \). A CPI less than 1 signifies that the project is incurring more costs than it is earning in value, indicating cost inefficiency. The Schedule Performance Index (SPI) is calculated as \( \text{SPI} = \frac{\text{EV}}{\text{PV}} \). Since \( \text{EV} = \text{PV} \), the SPI is \( \text{SPI} = \frac{\text{EV}}{\text{PV}} = 1 \). An SPI of 1 indicates that the project is exactly on schedule, meaning the work accomplished is equal to the work planned for that period. Therefore, the project is on schedule but over budget. This situation requires a focus on cost control measures to improve efficiency and bring the project back within its financial constraints, while maintaining the current pace of work completion.

The core concept being tested here is the appropriate application of variance analysis in Earned Value Management (EVM) as per ISO 21508:2018, specifically concerning the interpretation of schedule variance (SV) and cost variance (CV) when the project is significantly over budget and behind schedule.

Let’s consider a scenario where a project has a Planned Value (PV) of $100,000, an Earned Value (EV) of $70,000, and an Actual Cost (AC) of $120,000.

First, calculate the Schedule Variance (SV):
\(SV = EV – PV\)
\(SV = \$70,000 – \$100,000 = -\$30,000\)

Next, calculate the Cost Variance (CV):
\(CV = EV – AC\)
\(CV = \$70,000 – \$120,000 = -\$50,000\)

The Schedule Performance Index (SPI) is calculated as:
\(SPI = \frac{EV}{PV}\)
\(SPI = \frac{\$70,000}{\$100,000} = 0.7\)

The Cost Performance Index (CPI) is calculated as:
\(CPI = \frac{EV}{AC}\)
\(CPI = \frac{\$70,000}{\$120,000} \approx 0.58\)

A negative SV indicates that the project is behind schedule. An SV of -\$30,000 means the project has earned \$30,000 less value than planned for the work completed. A negative CV indicates that the project is over budget. A CV of -\$50,000 means the project has cost \$50,000 more than the value of the work performed. An SPI less than 1 (0.7 in this case) confirms the project is behind schedule, and a CPI less than 1 (0.58 in this case) confirms the project is over budget.

When both SV and CV are negative, and the CPI is significantly lower than the SPI (0.58 vs. 0.7), it suggests that the cost overruns are more pronounced than the schedule delays. This implies that the project is not only progressing slower than planned but is also consuming resources at a much higher rate than the value it is generating. The primary concern for corrective action would be the significant cost inefficiency. Therefore, the most critical aspect to address is the substantial cost overrun, as indicated by the low CPI, which suggests a fundamental issue with cost control or resource utilization efficiency. While the schedule delay is also important, the magnitude of the cost deviation warrants immediate and focused attention to understand the root causes of overspending relative to the work accomplished.

The core concept tested here is the appropriate application of performance indices in the context of ISO 21508:2018, specifically when forecasting the final project cost. The Schedule Performance Index (SPI) measures schedule efficiency, while the Cost Performance Index (CPI) measures cost efficiency. When forecasting the Estimate at Completion (EAC) using the formula \(EAC = BAC / CPI\), this assumes that the cost performance observed to date will continue for the remainder of the project. However, if the project team has implemented corrective actions that are expected to improve future cost performance, simply extrapolating past CPI might lead to an inaccurate and overly pessimistic forecast. The EAC formula \(EAC = AC + (BAC – EV) / CPI\) is used when current performance is expected to continue. Conversely, if future performance is expected to be different, a revised forecast is needed. The most appropriate method when future performance is expected to improve, and this improvement is quantifiable, is to adjust the remaining work’s cost estimate. A common way to represent this is \(EAC = AC + (BAC – EV) / CPI_{new}\) where \(CPI_{new}\) reflects the expected future performance. However, a more direct and conceptually sound approach, as implied by the question’s scenario of anticipated improvement, is to forecast the remaining work based on a new, improved performance expectation. The formula \(EAC = AC + (BAC – EV) / \text{New CPI}\) or \(EAC = AC + \text{Remaining Budget} / \text{New CPI}\) is used. In this specific scenario, the project has a Budget at Completion (BAC) of $500,000 and an Earned Value (EV) of $200,000. The Actual Cost (AC) incurred is $250,000. The current CPI is \(CPI = EV / AC = 200,000 / 250,000 = 0.8\). If the project continues at this rate, the EAC would be \(EAC = BAC / CPI = 500,000 / 0.8 = 625,000\). However, the scenario states that corrective actions are expected to improve future cost performance to a CPI of 1.1 for the remaining work. The remaining budget is \(BAC – EV = 500,000 – 200,000 = 300,000\). The forecast for the remaining work is \(300,000 / 1.1 \approx 272,727.27\). Therefore, the new EAC is the actual cost incurred plus the forecasted cost of the remaining work: \(EAC = AC + (\text{Remaining Budget} / \text{New CPI}) = 250,000 + (300,000 / 1.1) \approx 250,000 + 272,727.27 = 522,727.27\). This demonstrates a nuanced understanding of how to adjust forecasts based on anticipated changes in performance, a key aspect of ISO 21508:2018’s emphasis on proactive project management.

The core of this question lies in understanding how to interpret performance in the context of earned value management, specifically when dealing with schedule variances and cost variances that might indicate underlying issues beyond simple deviations. A project has a Planned Value (PV) of $150,000 and an Earned Value (EV) of $120,000. The Actual Cost (AC) is $130,000.

First, calculate the Schedule Variance (SV):
\(SV = EV – PV\)
\(SV = \$120,000 – \$150,000 = -\$30,000\)

Next, calculate the Cost Variance (CV):
\(CV = EV – AC\)
\(CV = \$120,000 – \$130,000 = -\$10,000\)

The Schedule Performance Index (SPI) is calculated as:
\(SPI = \frac{EV}{PV}\)
\(SPI = \frac{\$120,000}{\$150,000} = 0.80\)

The Cost Performance Index (CPI) is calculated as:
\(CPI = \frac{EV}{AC}\)
\(CPI = \frac{\$120,000}{\$130,000} \approx 0.923\)

A negative SV indicates that the project is behind schedule. A negative CV indicates that the project is over budget. An SPI less than 1 (0.80 in this case) confirms the schedule slippage. A CPI less than 1 (approximately 0.923) confirms the cost overrun. The combination of being behind schedule and over budget, with the schedule slippage being more pronounced in absolute terms (-\$30,000) than the cost overrun (-\$10,000), suggests that the primary driver of project underperformance is the delay in completing work, which in turn impacts the overall cost. The project has earned less value than planned and has spent more than the value earned. The fact that the schedule variance is a larger negative number than the cost variance implies that the project is significantly struggling with timely delivery, and this delay is a more critical issue than the immediate cost overruns relative to the work completed. Therefore, the most accurate interpretation is that the project is experiencing significant schedule slippage, which is the dominant performance issue.

The core of this question lies in understanding the relationship between the Schedule Performance Index (SPI) and the Cost Performance Index (CPI) in the context of earned value management, specifically as outlined in ISO 21508:2018. The scenario describes a project where the SPI is \(0.85\) and the CPI is \(1.15\).

The Schedule Performance Index (SPI) is calculated as \(SPI = \frac{EV}{PV}\), where \(EV\) is Earned Value and \(PV\) is Planned Value. An SPI of \(0.85\) indicates that the project is progressing at \(85\%\) of the planned pace, meaning it is behind schedule.

The Cost Performance Index (CPI) is calculated as \(CPI = \frac{EV}{AC}\), where \(AC\) is Actual Cost. A CPI of \(1.15\) indicates that the project is getting \(1.15\) units of value for every unit of cost incurred, meaning it is under budget.

The question asks about the implications of these two indices for the project’s overall health. A project is considered to be performing poorly if either its schedule or its budget is significantly off track. In this case, the project is behind schedule (SPI 1). This combination suggests that while the project is taking longer than planned, the work that *has* been completed is being done more cost-effectively than anticipated.

The most accurate interpretation of this situation, according to earned value management principles, is that the project is experiencing schedule slippage but is demonstrating cost efficiency. This means that the project manager needs to address the reasons for the delay while leveraging the cost savings to potentially mitigate the impact of the schedule overrun, or at least understand the root causes of both performance deviations. The project is not necessarily in a critical state of overall poor performance, nor is it performing exceptionally well in all aspects. It is a mixed performance scenario requiring careful analysis.

The core of this question lies in understanding the relationship between the Schedule Performance Index (SPI) and the Cost Performance Index (CPI) as indicators of project health, specifically within the context of ISO 21508:2018. The standard emphasizes that these indices are derived from the project’s baseline and actual performance data.

To determine the correct answer, one must first understand the definitions:
– SPI = Earned Value (EV) / Planned Value (PV)
– CPI = Earned Value (EV) / Actual Cost (AC)

The scenario describes a project where EV = $150,000, PV = $180,000, and AC = $160,000.

Calculating the indices:
SPI = $150,000 / $180,000 = 0.833
CPI = $150,000 / $160,000 = 0.938

An SPI of 0.833 indicates that the project is behind schedule, as less work has been earned than planned. A CPI of 0.938 indicates that the project is over budget, as more cost has been incurred than the value of the work performed.

The question asks for the most accurate interpretation of this performance. A project with an SPI less than 1 is performing behind schedule, and a project with a CPI less than 1 is performing over budget. Therefore, the project is both behind schedule and over budget.

The correct approach is to identify the option that accurately reflects both of these conditions. The explanation should detail how these indices are calculated and what values less than 1 signify according to Earned Value Management principles as outlined in ISO 21508:2018. It’s crucial to note that while both indices are below the benchmark of 1, the specific values provide a nuanced view of the project’s performance, highlighting a schedule slippage and a cost overrun. The explanation should also touch upon the importance of monitoring these metrics for proactive project management and corrective action, as advocated by the standard.

The core of ISO 21508:2018 is the integration of earned value management (EVM) principles into project and programme management. When assessing the performance of a project using EVM, understanding the implications of variances is crucial. The Schedule Performance Index (SPI) is a key metric, calculated as \( \text{SPI} = \frac{\text{EV}}{\text{PV}} \), where EV is Earned Value and PV is Planned Value. An SPI of less than 1 indicates that the project is behind schedule. The Cost Performance Index (CPI), calculated as \( \text{CPI} = \frac{\text{EV}}{\text{AC}} \), where AC is Actual Cost, also provides performance insights. A CPI of less than 1 signifies that the project is over budget.

Consider a scenario where a project has an SPI of 0.85 and a CPI of 0.92. This means that for every unit of planned work, only 0.85 units have been earned, indicating a schedule slippage. Simultaneously, for every unit of work earned, the project has spent 1/0.92, which is approximately 1.087 units of cost, indicating cost overruns. The question asks about the implications of these specific performance indices. A project manager would interpret these values as the project being both behind schedule and over budget. The explanation should focus on the direct meaning of these indices in terms of schedule and cost performance, and how they collectively inform the project’s status. The correct interpretation is that the project is performing worse than planned in both time and cost dimensions.

The core of this question lies in understanding the relationship between the Schedule Performance Index (SPI) and the Cost Performance Index (CPI) in the context of earned value management (EVM) as defined by ISO 21508:2018. The scenario describes a project where the SPI is \(0.85\) and the CPI is \(1.15\).

The Schedule Performance Index (SPI) is calculated as \(SPI = \frac{EV}{PV}\), where \(EV\) is Earned Value and \(PV\) is Planned Value. An SPI less than 1 indicates that the project is behind schedule. In this case, \(SPI = 0.85\) means that for every unit of planned work, only \(0.85\) units have been completed.

The Cost Performance Index (CPI) is calculated as \(CPI = \frac{EV}{AC}\), where \(AC\) is Actual Cost. A CPI greater than 1 indicates that the project is under budget for the work completed. In this case, \(CPI = 1.15\) means that for every unit of cost incurred, \(1.15\) units of value have been earned.

The question asks about the implications of these indices for the project’s progress and cost efficiency. A project with an SPI of \(0.85\) is demonstrably behind schedule. This means that less work has been accomplished than was planned for the time elapsed. Concurrently, a CPI of \(1.15\) signifies that the project is achieving more value for the money spent than anticipated. This indicates cost efficiency in the work that *has* been completed.

Therefore, the project is performing poorly in terms of schedule adherence but is performing well in terms of cost efficiency for the work accomplished. This combination suggests that while the project is taking longer than planned, the work being done is costing less than budgeted. The correct interpretation is that the project is behind schedule but over budget for the work completed relative to the *original* plan, or more precisely, that the cost of the work completed is less than the planned cost for that amount of work. However, the question asks about the overall project status. The project is behind schedule and is achieving its planned value at a lower cost than planned for that value. This means the project is over budget in terms of total expenditure relative to the planned expenditure for the current point in time, even though the work completed is cost-efficient. The most accurate description is that the project is behind schedule and has spent more than planned for the work completed, despite the efficiency of the completed work itself. The project is over budget in terms of total expenditure compared to the planned expenditure to date.

Let’s re-evaluate the CPI interpretation. \(CPI = \frac{EV}{AC}\). If \(CPI = 1.15\), then \(EV = 1.15 \times AC\). This means that for every dollar spent (\(AC\)), \(1.15\) dollars of value (\(EV\)) are earned. This is cost *efficiency*, meaning the project is getting more value for its money than planned.

Now consider the schedule. \(SPI = \frac{EV}{PV} = 0.85\). This means \(EV = 0.85 \times PV\). The project has completed only 85% of the work planned for this period.

The question asks about the project’s status. We know it’s behind schedule. What about the budget?
We have \(EV = 1.15 \times AC\) and \(EV = 0.85 \times PV\).
So, \(1.15 \times AC = 0.85 \times PV\).
This implies \(AC = \frac{0.85}{1.15} \times PV \approx 0.739 \times PV\).
This means the Actual Cost (\(AC\)) is approximately 73.9% of the Planned Value (\(PV\)). Since \(PV\) represents the budget for the work planned, and \(AC\) is the actual cost incurred, the project is under budget for the *planned* amount of work. However, the project is behind schedule, meaning less work has been done than planned. The question is about the project’s overall financial status relative to its plan.

The project is behind schedule (SPI 1). This means that the value earned is less than planned, but the cost to earn that value is also less than planned for that amount of work. However, when comparing the actual cost to the planned value for the period, \(AC < PV\). This indicates that the project is under budget for the work that *should have been* completed. The project is behind schedule, but the cost of the work completed is less than the planned cost for that amount of work. The project is under budget for the work completed.

Let's consider the implications for the Estimate at Completion (EAC) and Variance at Completion (VAC).
\(EAC = \frac{PV}{CPI}\) (if performance continues as is) or \(EAC = AC + BAC – EV\) (if future performance is re-estimated).
Using the first formula, \(EAC = \frac{PV}{1.15}\). Since \(PV\) is the budget for the entire project, and \(EAC < PV\), this suggests the project will finish under budget.
However, the question is about the current status.

The project is behind schedule (SPI = 0.85). The work that has been completed has been done so efficiently (CPI = 1.15). This means that for the amount of work actually completed (EV), the cost incurred (AC) is less than the planned cost for that amount of work. Therefore, the project is under budget for the work performed. The project is behind schedule, but the cost of the work completed is less than the planned cost for that amount of work.

The correct interpretation is that the project is behind schedule, but the work completed is cost-efficient. This means that the actual cost incurred for the work done is less than the planned cost for that same amount of work. Therefore, the project is under budget for the work completed.

Final check:
SPI = 0.85 means EV AC. Project is under budget for the work completed.
So, the project is behind schedule and under budget for the work completed.

Let’s consider the options.
Option a) The project is behind schedule and under budget for the work completed. This aligns with our analysis.
Option b) The project is ahead of schedule and over budget for the work completed. This contradicts both SPI and CPI.
Option c) The project is behind schedule and over budget for the work completed. This contradicts CPI.
Option d) The project is ahead of schedule and under budget for the work completed. This contradicts SPI.

Therefore, the correct interpretation is that the project is behind schedule and under budget for the work completed.

The core concept being tested here is the appropriate response to a significant variance in the Schedule Performance Index (SPI) and Cost Performance Index (CPI) within the Earned Value Management (EVM) framework as defined by ISO 21508:2018. Specifically, a project exhibits an SPI of 0.85 and a CPI of 1.15. This indicates that the project is behind schedule (SPI 1). The explanation requires understanding that while being under budget is generally positive, the delay in schedule necessitates a focused investigation into the root causes of the schedule slippage. The primary objective is to determine *why* the project is behind schedule, as this is the critical performance issue that needs addressing. The fact that the project is under budget for the work completed suggests that either the planned labor rates were higher than actual, or less labor was used than planned to achieve the earned value, which could be a symptom of the schedule delay itself (e.g., tasks taking longer, requiring more resources than initially estimated, or tasks being deferred). Therefore, the most appropriate action is to conduct a thorough root cause analysis of the schedule delay. This analysis should explore factors such as resource availability, task dependencies, scope creep impacting the timeline, or estimation inaccuracies for the duration of specific activities. Understanding these underlying reasons is crucial for implementing corrective actions that can bring the project back on track. Without this analysis, any corrective actions might be misdirected or ineffective.

The core of this question lies in understanding how to interpret performance against the baseline plan when the project is significantly behind schedule. The Schedule Performance Index (SPI) is a key metric in Earned Value Management (EVM) that indicates the efficiency of work completed relative to the planned schedule. It is calculated as \( \text{SPI} = \frac{\text{EV}}{\text{PV}} \). In this scenario, the project has completed \( \$150,000 \) of work (Earned Value, EV) but was planned to have completed \( \$200,000 \) of work by this point (Planned Value, PV). Therefore, the SPI is \( \frac{\$150,000}{\$200,000} = 0.75 \). An SPI of 0.75 signifies that the project is only achieving 75% of the work planned for the period. This directly translates to being behind schedule. The question asks for the most accurate description of the project’s schedule status based on this performance. A project with an SPI of 0.75 is unequivocally behind schedule. The explanation should focus on the definition and implication of SPI in relation to schedule performance, emphasizing that a value less than 1 indicates a schedule slippage. It should also touch upon how this metric, alongside the Cost Performance Index (CPI), provides a comprehensive view of project health, but the question specifically targets schedule status. The explanation must clarify that the calculated SPI directly reflects the extent to which the project is ahead or behind its planned timeline, with values below 1 indicating a deficit in schedule accomplishment.

The core of this question lies in understanding how to interpret performance against a baseline when the scope of work has been legitimately altered. In Earned Value Management (EVM), the Performance Measurement Baseline (PMB) represents the authorized time-phased budget for planned work. When a change control process formally approves a reduction in the scope of work, the PMB must be adjusted to reflect this new reality. This adjustment is crucial for maintaining the integrity of performance metrics.

The initial planned value (PV) for the entire project was \( \$500,000 \). The actual cost (AC) incurred to date is \( \$250,000 \). The earned value (EV) for the work completed is \( \$220,000 \). A scope reduction has been approved, which means the total planned budget for the project, as originally defined, is no longer relevant. The approved scope reduction reduces the total planned budget by \( \$100,000 \). Therefore, the new total planned budget (and the revised PMB) is \( \$500,000 – \$100,000 = \$400,000 \).

To assess performance accurately after a scope change, the EV and AC are compared against the *revised* PMB. The schedule variance (SV) is calculated as \( EV – PV \). However, in this context, the relevant ‘PV’ for performance assessment is the planned value of the *remaining* work within the revised baseline, or more directly, the comparison of EV to the planned value *for the work that was supposed to have been done according to the revised baseline*. A more direct way to assess schedule performance after a scope change is to consider the schedule variance relative to the *original* planned value for the completed work, but the question asks about the overall project status and the impact of the scope change on future planning and assessment.

The most appropriate way to assess the current performance in light of the scope reduction is to consider the schedule variance in relation to the *original* planned value for the work that was supposed to be completed by the current point in time, and then consider the impact on the overall project. However, the question focuses on the implication of the scope reduction on the *overall* project status and future performance assessment.

The critical concept here is that the PMB must be re-baselined. The original PV for the work that was planned to be completed by the current point in time is not explicitly given, but we know the total original PV was \( \$500,000 \). The EV is \( \$220,000 \). The AC is \( \$250,000 \). The scope reduction means the total budget at completion (BAC) is now \( \$400,000 \).

The schedule variance (SV) is \( EV – PV \). Without the specific PV for the work completed, we cannot calculate the SV directly. However, the question is about the *implication* of the scope reduction on performance assessment. The most significant implication is that the original baseline is no longer valid for forecasting. The project is now operating under a revised baseline.

The cost variance (CV) is \( EV – AC = \$220,000 – \$250,000 = -\$30,000 \). This indicates a cost overrun for the work performed.

The schedule performance index (SPI) is \( EV / PV \). The cost performance index (CPI) is \( EV / AC = \$220,000 / \$250,000 = 0.88 \).

The scope reduction fundamentally alters the project’s total planned budget. The correct approach to assessing performance after a scope change is to ensure that the EV and AC are compared against the *revised* baseline. The original PV for the work that was *supposed* to be completed by the current date, according to the *original* plan, is a component of the original \( \$500,000 \). The EV of \( \$220,000 \) represents the value of work completed. The AC of \( \$250,000 \) is the cost incurred. The scope reduction to \( \$400,000 \) means the project is now aiming for a lower total completion cost.

The question asks about the most accurate statement regarding the project’s status. The project has incurred more costs than the value of work completed (negative CV). The scope reduction means the total planned budget is now \( \$400,000 \). The earned value of \( \$220,000 \) is less than the actual cost of \( \$250,000 \). The crucial point is that the project is now operating under a revised baseline. The original planned value for the work completed, if it were still relevant, would be compared to the earned value. However, with a scope reduction, the focus shifts to the revised total budget. The project is over budget for the work performed, and the total project budget has been reduced. The most accurate statement must reflect the current financial performance and the impact of the scope change on the overall project.

The project is over budget for the work performed, as indicated by the negative cost variance. The scope reduction has lowered the total planned budget. The earned value of \( \$220,000 \) is less than the actual cost of \( \$250,000 \). The revised total budget at completion is \( \$400,000 \). The project is currently performing below the revised budget for the work completed, and the overall project is now planned to be completed at a lower total cost. The most accurate assessment is that the project is over budget for the work performed, and the total project budget has been reduced, implying a need to re-evaluate future plans against the new baseline. The project is over budget for the work performed, and the total project budget has been reduced.

The calculation for the correct option is based on the direct interpretation of the provided figures and the impact of the scope change. The project has an EV of \( \$220,000 \) and an AC of \( \$250,000 \). This results in a Cost Variance (CV) of \( EV – AC = \$220,000 – \$250,000 = -\$30,000 \). This clearly indicates the project is over budget for the work performed. The original Budget at Completion (BAC) was \( \$500,000 \). A scope reduction of \( \$100,000 \) means the revised BAC is now \( \$500,000 – \$100,000 = \$400,000 \). Therefore, the project is over budget for the work performed, and the total project budget has been reduced.

The correct answer is: The project is over budget for the work performed, and the total project budget has been reduced.

The core principle being tested here is the appropriate response to a significant deviation in project performance as measured by Earned Value Management (EVM) metrics, specifically when the Cost Performance Index (CPI) is substantially below 1. A CPI of 0.75 indicates that for every dollar budgeted, only $0.75 has been earned in value, signifying a significant cost overrun. ISO 21508:2018 emphasizes proactive management and corrective action. When such a deviation occurs, the primary focus should be on understanding the root causes of the cost overrun and implementing corrective actions to bring the project back into alignment with its plan, or to re-baseline if necessary. This involves a thorough analysis of variances, identifying specific work packages or activities contributing to the overspend, and then developing and implementing strategies to mitigate further cost escalation. Simply adjusting the schedule without addressing the underlying cost issues would be insufficient. Similarly, accepting the overrun without investigation or reporting it to stakeholders would violate principles of transparency and control. Forecasting future performance based on the current unfavorable trend is a necessary step, but it is a consequence of the deviation, not the primary corrective action itself. Therefore, the most appropriate response is to conduct a detailed variance analysis to identify root causes and implement corrective actions.

The core of this question lies in understanding the relationship between the Schedule Performance Index (SPI) and the Cost Performance Index (CPI) as indicators of project health, specifically within the context of ISO 21508:2018. The standard emphasizes that while these indices provide valuable insights, their interpretation requires careful consideration of the project’s baseline and the underlying causes of any deviations.

Let’s consider a scenario where a project has a Planned Value (PV) of \$100,000, an Earned Value (EV) of \$90,000, and an Actual Cost (AC) of \$95,000.

First, we calculate the Schedule Performance Index (SPI):
\[ SPI = \frac{EV}{PV} = \frac{\$90,000}{\$100,000} = 0.9 \]
This indicates that the project is progressing at 90% of the planned rate.

Next, we calculate the Cost Performance Index (CPI):
\[ CPI = \frac{EV}{AC} = \frac{\$90,000}{\$95,000} \approx 0.947 \]
This indicates that the project is achieving approximately \$0.947 of value for every dollar spent.

The question asks about the most appropriate interpretation of these values in relation to the project’s overall status. A project with an SPI of 0.9 and a CPI of approximately 0.947 is behind schedule and over budget. The SPI of 0.9 suggests that only 90% of the planned work has been completed by the reporting period. The CPI of 0.947 suggests that the cost efficiency is slightly better than schedule efficiency, but still indicates that costs are higher than planned for the work completed.

The correct interpretation is that the project is experiencing both schedule slippage and cost overruns, with the cost overrun being proportionally less severe than the schedule slippage. This means that while the project is taking longer than planned, the cost per unit of work completed is also higher than planned, but not as significantly as the time delay. It is crucial to recognize that these indices are diagnostic tools, and further investigation into the root causes of these variances is necessary for effective corrective action, as advocated by ISO 21508:2018. Understanding the interplay between schedule and cost performance is fundamental to proactive project management.

The core concept being tested here is the appropriate application of variance analysis in Earned Value Management (EVM) as defined by ISO 21508:2018, specifically concerning the interpretation of schedule variances and their implications for project forecasting. The question focuses on a scenario where a project exhibits a negative schedule variance (SV) and a positive cost variance (CV). A negative SV indicates that the project is behind schedule, meaning the value of work performed (Earned Value, EV) is less than the planned value of work scheduled (Planned Value, PV). A positive CV suggests that the project is under budget for the work performed, meaning the actual cost (AC) is less than the Earned Value (EV).

The calculation to determine the Schedule Performance Index (SPI) is \( \text{SPI} = \frac{\text{EV}}{\text{PV}} \). In this scenario, if EV is \( \$75,000 \) and PV is \( \$100,000 \), then \( \text{SPI} = \frac{\$75,000}{\$100,000} = 0.75 \). An SPI below 1.0 signifies that the project is behind schedule. The calculation for the Cost Performance Index (CPI) is \( \text{CPI} = \frac{\text{EV}}{\text{AC}} \). If EV is \( \$75,000 \) and AC is \( \$65,000 \), then \( \text{CPI} = \frac{\$75,000}{\$65,000} \approx 1.15 \). A CPI above 1.0 indicates that the project is performing better than budget for the work completed.

The question asks for the most accurate interpretation of this situation according to ISO 21508:2018 principles. A project that is behind schedule (SPI 1) is experiencing a common project management challenge. The primary concern from a schedule perspective is the delay, which needs to be addressed to bring the project back on track. While the cost performance is favorable, it does not negate the schedule slippage. The most appropriate response is to focus on the schedule deviation and the need for corrective actions to improve the SPI, as this directly impacts the project’s timeline and ultimate delivery. The favorable cost variance, while positive, does not automatically imply that the project will finish on time or that the current pace is sustainable without impacting future schedule performance. Therefore, prioritizing schedule recovery is paramount.

The core of this question lies in understanding the implications of a project’s performance when the Schedule Performance Index (SPI) is less than 1 and the Cost Performance Index (CPI) is also less than 1. An SPI of 0.85 indicates that the project is progressing at only 85% of the planned rate, meaning it is behind schedule. A CPI of 0.92 signifies that for every unit of currency spent, only 0.92 units of value have been earned, indicating that the project is over budget. When both indices are below 1, the project is experiencing schedule slippage and cost overruns simultaneously. This dual negative performance necessitates a comprehensive review of both the schedule and the budget to identify root causes and implement corrective actions. The explanation of the correct approach involves recognizing that such a situation demands a proactive and integrated response. It requires an in-depth analysis of the variances to understand *why* the project is behind schedule and over budget. This might involve examining resource allocation, task dependencies, scope creep, productivity issues, or unforeseen external factors. The corrective actions must then address these identified causes, potentially involving schedule compression techniques, re-baselining, cost control measures, or a combination thereof. The explanation should emphasize that simply addressing one aspect (e.g., accelerating the schedule without considering cost implications) would be insufficient and potentially detrimental. The correct response is to acknowledge the dual nature of the problem and the need for a balanced, integrated corrective strategy that aims to bring both schedule and cost performance back in line with the plan.

The core of this question lies in understanding how to interpret the performance of a project when using Earned Value Management (EVM) principles as defined by ISO 21508:2018. Specifically, it tests the ability to diagnose the underlying causes of schedule and cost variances.

A project has a Planned Value (PV) of \( \$50,000 \) and an Earned Value (EV) of \( \$45,000 \). The Actual Cost (AC) incurred to achieve this earned value is \( \$55,000 \).

First, calculate the Schedule Variance (SV):
\( SV = EV – PV \)
\( SV = \$45,000 – \$50,000 \)
\( SV = -\$5,000 \)
This indicates a schedule delay, as the value of work performed is less than the value of work planned.

Next, calculate the Cost Variance (CV):
\( CV = EV – AC \)
\( CV = \$45,000 – \$55,000 \)
\( CV = -\$10,000 \)
This indicates a cost overrun, as the actual cost incurred is greater than the value of work performed.

The Schedule Performance Index (SPI) is calculated as:
\( SPI = \frac{EV}{PV} \)
\( SPI = \frac{\$45,000}{\$50,000} = 0.9 \)
An SPI less than 1 signifies that the project is behind schedule.

The Cost Performance Index (CPI) is calculated as:
\( CPI = \frac{EV}{AC} \)
\( CPI = \frac{\$45,000}{\$55,000} \approx 0.818 \)
A CPI less than 1 signifies that the project is over budget.

The combination of a negative SV (or SPI < 1) and a negative CV (or CPI < 1) points to a project that is both behind schedule and over budget. This scenario, where the project has completed less work than planned and has spent more money than the value of the work completed, suggests that the project team is not performing as efficiently as anticipated. The overspending (negative CV) is more significant in absolute terms than the under-earning relative to plan (negative SV). This implies that while the project is behind schedule, the primary concern from a financial perspective is the substantial cost overrun relative to the work actually accomplished. The project is not only taking longer than planned but is also consuming resources at a rate that exceeds the value it is delivering. This situation requires immediate attention to identify the root causes of both the schedule slippage and the cost overruns, which could stem from poor estimation, scope creep, inefficient resource utilization, or unforeseen technical challenges.

The core concept being tested here is the appropriate application of variance analysis in Earned Value Management (EVM) as per ISO 21508:2018, specifically when dealing with a project exhibiting significant schedule slippage and cost overruns. The standard emphasizes proactive management and understanding the root causes of deviations. When both the Schedule Variance (SV) and Cost Variance (CV) are negative, it indicates that the project is behind schedule and over budget. The Schedule Performance Index (SPI) and Cost Performance Index (CPI) would also be less than 1.

A negative SV implies that the work accomplished is less than planned for the period, while a negative CV signifies that the cost incurred to achieve that work is greater than the budgeted cost for that work. In such a scenario, the primary focus for corrective action should be on understanding *why* the project is both late and expensive. This requires a deeper dive into the contributing factors. Simply adjusting the baseline without addressing the underlying performance issues would be a superficial approach. Similarly, focusing solely on schedule recovery without considering the cost implications, or vice versa, would be incomplete. The most robust approach involves a comprehensive root cause analysis to identify the specific issues leading to both schedule and cost performance degradation, followed by the development of targeted corrective actions that address these root causes. This might involve re-planning, resource reallocation, process improvements, or risk mitigation strategies, all aimed at improving future performance. The explanation should highlight that the goal is not just to report the variances but to understand and act upon them to bring the project back on track.

The core of this question lies in understanding the relationship between the Schedule Performance Index (SPI) and the Cost Performance Index (CPI) as indicators of project health, specifically within the context of ISO 21508:2018. The standard emphasizes that while these indices provide valuable insights, their interpretation requires careful consideration of the project’s baseline and the underlying causes of deviations.

The scenario describes a project where the SPI is \(0.95\) and the CPI is \(1.10\).

SPI = \(0.95\) indicates that the project is progressing at \(95\%\) of the planned rate, meaning it is behind schedule.
CPI = \(1.10\) indicates that the project is achieving \(110\%\) of the value earned for every unit of cost incurred, meaning it is under budget for the work completed.

When both SPI and CPI deviate from \(1.0\), a nuanced interpretation is required. A project behind schedule (SPI 1) suggests that the project team is being efficient with the resources they *are* using, but they are not using them fast enough to meet the schedule. This often implies that the work that has been completed is of high quality and cost-effective, but the pace of execution is the primary issue.

The question asks for the most accurate interpretation of this situation according to the principles of Earned Value Management as outlined in ISO 21508:2018.

Option a) correctly identifies that the project is behind schedule but is achieving more value than the cost incurred for the work completed. This accurately reflects the implications of SPI 1. The explanation for this option would detail that a sub-unity SPI signifies schedule slippage, while a supra-unity CPI indicates cost efficiency relative to the earned value. This combination suggests that while the project is not meeting its timeline, the completed work is being performed cost-effectively. The underlying cause for the schedule delay might be resource allocation issues, unforeseen technical challenges that slowed progress, or scope creep that wasn’t adequately managed in terms of schedule impact. The key is that the *efficiency* of the work performed is positive, but the *volume* of work performed against the plan is insufficient.

Option b) incorrectly suggests the project is ahead of schedule and over budget. This would correspond to SPI > 1 and CPI < 1, which is the opposite of the given values.

Option c) incorrectly suggests the project is behind schedule and over budget. This would correspond to SPI < 1 and CPI 1 and CPI > 1.

Therefore, the most accurate interpretation is that the project is behind schedule but is achieving more value than the cost incurred for the work completed.

The core of this question lies in understanding how to adjust the baseline for scope changes within an Earned Value Management (EVM) framework, as guided by ISO 21508:2018. When a legitimate scope change is approved, the original baseline (Planned Value, PV) must be revised to reflect the new scope. This revision is not arbitrary; it must be based on the value of the work added or removed. The Earned Value (EV) represents the value of work actually performed, and the Actual Cost (AC) is the cost incurred for that work. The Cost Performance Index (CPI) and Schedule Performance Index (SPI) are calculated using the *current* baseline.

Consider a project where the original baseline budget at completion (BAC) was \( \$1,000,000 \). Midway through, a change request is approved to add scope valued at \( \$100,000 \). This increases the BAC to \( \$1,100,000 \). If, at the time of the change, the project had completed \( \$400,000 \) of the original scope (meaning EV = \( \$400,000 \)) and incurred \( \$450,000 \) in costs (AC = \( \$450,000 \)), the performance indices would be calculated against the *new* baseline. The EV remains \( \$400,000 \). The PV for the remaining work would be adjusted to reflect the new total BAC. The CPI would be calculated as \( \frac{EV}{AC} = \frac{\$400,000}{\$450,000} \approx 0.89 \). The SPI would be calculated as \( \frac{EV}{PV_{revised}} \), where \( PV_{revised} \) is the planned value of the work that *should have been completed* according to the revised baseline. If the original plan was to have \( \$500,000 \) of work completed by this point, and the added scope does not alter this timing, the revised PV for work completed would still be \( \$500,000 \), leading to an SPI of \( \frac{\$400,000}{\$500,000} = 0.80 \).

The critical concept is that the baseline adjustment for scope changes directly impacts the calculation of performance indices for future reporting. It ensures that performance is measured against the authorized scope and budget. Without this adjustment, performance metrics would be misleading, showing poor performance due to scope additions that were never accounted for in the original plan. The correct approach involves updating the BAC and subsequently recalculating the PV for the remaining work to maintain accurate performance measurement.

The core of this question lies in understanding the distinction between planned value (PV), earned value (EV), and actual cost (AC) within the Earned Value Management (EVM) framework as defined by ISO 21508:2018. Specifically, it probes the interpretation of a project’s performance when the earned value is less than the planned value, and the actual cost is greater than the earned value.

Let’s consider a hypothetical scenario to illustrate the calculation and reasoning. Suppose a project has a planned value of \( \$10,000 \) for a specific period, meaning \( \$10,000 \) worth of work was scheduled. However, by the end of that period, only \( \$8,000 \) worth of work was actually completed, so the earned value is \( \$8,000 \). The cost incurred to achieve this completed work was \( \$9,000 \), making the actual cost \( \$9,000 \).

From these figures, we can calculate the Schedule Variance (SV) and Cost Variance (CV):
\( SV = EV – PV = \$8,000 – \$10,000 = -\$2,000 \)
\( CV = EV – AC = \$8,000 – \$9,000 = -\$1,000 \)

A negative SV indicates that the project is behind schedule, as less work has been accomplished than planned. A negative CV signifies that the project is over budget, as the cost incurred to complete the work is higher than the value of the work performed.

Therefore, the project is experiencing both schedule slippage and cost overruns. The explanation should articulate that the project is performing poorly in both aspects: it has not completed the planned amount of work, and the cost to complete the work that *was* done exceeded its earned value. This dual underperformance is a critical indicator for project managers to investigate the root causes and implement corrective actions. The explanation must emphasize that this situation represents a deviation from the baseline plan in terms of both time and cost, necessitating a thorough review of resource allocation, productivity, and any unforeseen issues that contributed to the variances. The focus is on the interpretation of these variances as indicators of project health and the implications for future performance.

The scenario describes a project where the Planned Value (PV) for a specific period is \( \$50,000 \), the Earned Value (EV) achieved is \( \$45,000 \), and the Actual Cost (AC) incurred is \( \$55,000 \). The question asks about the implications of these values for project performance.

First, we calculate the Schedule Variance (SV) and Cost Variance (CV).
Schedule Variance (SV) = EV – PV = \( \$45,000 – \$50,000 = -\$5,000 \). A negative SV indicates that the project is behind schedule.
Cost Variance (CV) = EV – AC = \( \$45,000 – \$55,000 = -\$10,000 \). A negative CV indicates that the project is over budget.

Next, we calculate the Schedule Performance Index (SPI) and Cost Performance Index (CPI).
Schedule Performance Index (SPI) = EV / PV = \( \$45,000 / \$50,000 = 0.9 \). An SPI less than 1 indicates the project is behind schedule.
Cost Performance Index (CPI) = EV / AC = \( \$45,000 / \$55,000 \approx 0.818 \). A CPI less than 1 indicates the project is over budget.

The Schedule Performance Index (SPI) of 0.9 signifies that for every dollar of planned work, only \( \$0.90 \) worth of work has been completed, indicating a schedule slippage. The Cost Performance Index (CPI) of approximately 0.818 indicates that for every dollar spent, only \( \$0.818 \) worth of value has been earned, signifying cost overruns. Therefore, the project is both behind schedule and over budget. The explanation focuses on these derived performance indicators and their interpretation within the Earned Value Management framework as defined by ISO 21508:2018, emphasizing that a project is performing poorly in terms of both time and cost when both SV and CV are negative, or SPI and CPI are less than 1. This understanding is crucial for proactive project management and decision-making.

The core of this question lies in understanding how to interpret and act upon performance variances within the Earned Value Management (EVM) framework as defined by ISO 21508:2018. Specifically, it tests the understanding of the relationship between the Schedule Performance Index (SPI) and the Cost Performance Index (CPI) and their implications for corrective actions.

A project has a Planned Value (PV) of $100,000, an Earned Value (EV) of $80,000, and an Actual Cost (AC) of $90,000.

First, calculate the Schedule Performance Index (SPI):
\[ \text{SPI} = \frac{\text{EV}}{\text{PV}} = \frac{\$80,000}{\$100,000} = 0.8 \]
This indicates that for every dollar of planned work, only $0.80 worth of work has been completed. The project is behind schedule.

Next, calculate the Cost Performance Index (CPI):
\[ \text{CPI} = \frac{\text{EV}}{\text{AC}} = \frac{\$80,000}{\$90,000} \approx 0.89 \]
This indicates that for every dollar spent, only $0.89 worth of work has been earned. The project is over budget.

The scenario presents a project that is both behind schedule (SPI < 1) and over budget (CPI < 1). When both SPI and CPI are less than 1, it signifies a dual problem: the project is not progressing as planned in terms of schedule, and it is also consuming more resources than it is earning in value.

The most appropriate response in such a situation, according to EVM principles, is to address both the schedule slippage and the cost overrun. This typically involves a thorough root cause analysis to understand why work is taking longer than planned and costing more. Potential corrective actions could include re-planning tasks, improving resource allocation, enhancing productivity, or renegotiating scope or deadlines if feasible. Simply focusing on schedule recovery without addressing the cost overrun, or vice versa, would be insufficient. The explanation should highlight the need for integrated corrective actions that tackle both performance dimensions. The objective is to bring the project back into alignment with its planned trajectory, considering both time and cost constraints.

The scenario describes a project where the planned value (PV) for a completed work package is \( \$15,000 \). The actual cost (AC) incurred for this work package was \( \$18,000 \). The earned value (EV) for the work package, based on the progress achieved, is \( \$12,000 \).

To determine the Cost Performance Index (CPI), the formula is \( \text{CPI} = \frac{\text{EV}}{\text{AC}} \).
Substituting the given values:
\( \text{CPI} = \frac{\$12,000}{\$18,000} \)
\( \text{CPI} = \frac{12}{18} \)
\( \text{CPI} = \frac{2}{3} \)
\( \text{CPI} \approx 0.67 \)

The Schedule Performance Index (SPI) is calculated using the formula \( \text{SPI} = \frac{\text{EV}}{\text{PV}} \).
Substituting the given values:
\( \text{SPI} = \frac{\$12,000}{\$15,000} \)
\( \text{SPI} = \frac{12}{15} \)
\( \text{SPI} = \frac{4}{5} \)
\( \text{SPI} = 0.80 \)

The question asks for the interpretation of the project’s performance based on these indices. A CPI less than 1 indicates that the project is over budget for the work performed, meaning more money was spent than planned for the accomplished scope. An SPI less than 1 indicates that the project is behind schedule, meaning less work was completed than planned for the time elapsed. Therefore, the project is both over budget and behind schedule. The correct interpretation is that the project is performing poorly in terms of both cost and schedule adherence, requiring corrective actions to bring it back on track. This aligns with the principles of earned value management as outlined in ISO 21508:2018, which emphasizes the importance of monitoring and controlling project performance against baselines. The analysis of CPI and SPI provides critical insights into the project’s health, enabling proactive management and informed decision-making to mitigate risks and improve outcomes.

The core of this question lies in understanding the relationship between the Schedule Performance Index (SPI) and the Cost Performance Index (CPI) as indicators of project health, specifically within the framework of ISO 21508:2018. The standard emphasizes that while both indices provide valuable insights, their interpretation in isolation can be misleading. A project with an SPI of 0.95 indicates that the project is progressing at 95% of the planned rate, meaning it is slightly behind schedule. A CPI of 1.05 signifies that the project is achieving 105% of the value for the cost incurred, meaning it is under budget for the work completed.

When both indices are favorable or unfavorable, the interpretation is generally straightforward. However, when one is favorable and the other is unfavorable, a more nuanced analysis is required. In this scenario, the project is behind schedule (SPI 1). This situation suggests that while the project is taking longer than planned, the cost efficiency for the work that *has* been accomplished is good. This could be due to several factors, such as efficient resource utilization on the tasks that are progressing, or perhaps a delay in a high-cost activity that has not yet significantly impacted the overall budget.

The critical insight from ISO 21508:2018 is that a project manager must investigate the root causes of such discrepancies. Simply observing that the project is behind schedule but under budget does not automatically imply a positive overall outlook. The explanation for the schedule slippage needs to be understood. Is it due to scope creep that wasn’t properly managed, or external factors? Is the under-budget status a temporary anomaly, or a sustainable efficiency? The standard advocates for a holistic view, considering the interplay of schedule and cost performance. Therefore, the most accurate interpretation is that the project is experiencing schedule delays but is currently cost-efficient for the work completed, necessitating further investigation into the causes of the delay. This aligns with the principle of using EVM to identify deviations and prompt corrective actions.

The core of this question lies in understanding how to interpret and respond to deviations from planned performance within an Earned Value Management (EVM) framework, specifically as outlined in ISO 21508:2018. The scenario presents a project with a significant negative schedule variance (SV) and a positive cost variance (CV). A negative SV indicates that the project is behind schedule, meaning the value of work performed (Earned Value, EV) is less than the value of work scheduled (Planned Value, PV). A positive CV signifies that the cost of work performed (Actual Cost, AC) is less than the Earned Value (EV), suggesting the project is currently under budget for the work completed.

The correct approach involves diagnosing the root cause of these variances and implementing corrective actions. A negative SV often points to issues with resource availability, productivity, or unforeseen delays. A positive CV, while seemingly good, can be a warning sign if it’s achieved by sacrificing quality or by deferring necessary activities that will impact future progress. Therefore, a comprehensive response must address both the schedule slippage and the underlying reasons for the cost savings.

Focusing on the negative SV, the project manager needs to identify why work is not progressing as planned. This might involve analyzing task dependencies, resource allocation, and potential bottlenecks. For the positive CV, the manager should investigate if the cost savings are sustainable or if they are a result of cutting corners or delaying critical path activities.

Considering the options, the most effective response would be one that seeks to understand the interrelationship between the variances and plans for recovery. This involves a detailed analysis of the project’s critical path, a review of resource productivity, and an assessment of whether the cost savings are genuine or a precursor to future cost overruns or schedule delays. The aim is to bring the project back into alignment with its baseline plan or to re-baseline if necessary, ensuring that corrective actions address the root causes and are sustainable. The explanation should emphasize the need for a proactive and analytical approach to variance management, rather than simply reacting to the numbers. It’s about understanding the ‘why’ behind the variances and formulating a strategy that rectifies the situation holistically.

The core principle being tested here is the appropriate application of variance analysis in Earned Value Management (EVM) as defined by ISO 21508:2018, specifically concerning the interpretation of schedule performance. The Schedule Variance (SV) is calculated as \(SV = EV – PV\). In this scenario, the Earned Value (EV) is \(150,000\) and the Planned Value (PV) is \(180,000\). Therefore, \(SV = 150,000 – 180,000 = -30,000\). A negative SV indicates that the project is behind schedule. The Schedule Performance Index (SPI) is calculated as \(SPI = EV / PV\). In this case, \(SPI = 150,000 / 180,000 = 0.833\). An SPI less than 1.0 signifies that the project is progressing at a slower pace than planned. ISO 21508:2018 emphasizes that while SV and SPI provide quantitative measures of schedule performance, they do not inherently explain the *reasons* for the deviation. The explanation of the schedule slippage requires further investigation into the underlying causes, such as resource constraints, scope changes, or estimation inaccuracies. The correct interpretation is that the project is behind schedule, and the magnitude of this slippage is \(30,000\) in value terms, with an efficiency of \(0.833\) for schedule progress. This indicates a need for corrective actions to bring the project back on track.

The core of ISO 21508:2018 is the integration of earned value management (EVM) principles into project and programme management. A critical aspect is the establishment of a baseline against which performance is measured. This baseline, known as the Performance Measurement Baseline (PMB), is a time-phased budget that represents the planned work. The PMB is crucial for calculating key EVM metrics like Planned Value (PV), Earned Value (EV), and Actual Cost (AC). When a project experiences scope changes, these changes must be formally incorporated into the PMB to maintain the integrity of the EVM system. This ensures that performance comparisons are made against a realistic and approved plan. Without proper baseline management, EVM metrics become misleading, hindering effective project control and forecasting. The standard emphasizes that the PMB is not static; it evolves with approved changes, allowing for accurate assessment of variances and the development of reliable forecasts. Therefore, the most appropriate action when scope changes are approved is to update the PMB to reflect these changes, ensuring continued valid performance measurement.