Which of the following metrics demonstrates to a project manager if a project is overspending or underspending?
Click on the arrows to vote for the correct answer
A. B. C. D.C.
231
The metric that demonstrates to a project manager if a project is overspending or underspending is the Cost Performance Index (CPI).
The Cost Performance Index (CPI) is a measure of the project's cost efficiency, indicating the value of the work completed relative to the actual cost spent. It is calculated by dividing the earned value (EV) by the actual cost (AC). A CPI greater than 1 indicates the project is under budget, while a CPI less than 1 indicates the project is over budget.
The other metrics listed are:
A. Estimate at Completion (EAC) - is the predicted total cost of the project, taking into account current project performance. It is calculated using various methods such as ETC (Estimate to Complete) or EVM (Earned Value Management).
B. Budget at Completion (BAC) - is the total budgeted cost of the project.
D. Estimate to Complete (ETC) - is an estimate of the remaining cost needed to complete the project. It is often used to calculate the EAC.
While these metrics provide valuable information to the project manager, the CPI is the most useful in identifying if a project is overspending or underspending.