A consulting firm uses Dynamics 365 Project Operations to manage fixed-price projects. During project execution, the project manager notices that the actual cost is exceeding the budget. What should the project manager do to track and communicate the impact on profit?
Trap 1: Analyze resource utilization percentages to identify over-allocated…
Resource utilization does not directly measure profit impact.
Trap 2: Review the Schedule Performance Index (SPI) to assess if the…
SPI measures schedule, not cost performance.
Trap 3: Compare the project budget to the actual cost in the project…
Invoices reflect billed amounts, not ongoing cost efficiency.
- A
Analyze resource utilization percentages to identify over-allocated resources.
Why wrong: Resource utilization does not directly measure profit impact.
- B
Review the Cost Performance Index (CPI) on the project and update the estimate at completion (EAC).
CPI is the correct metric to monitor cost efficiency and forecast final costs.
- C
Review the Schedule Performance Index (SPI) to assess if the project is behind schedule.
Why wrong: SPI measures schedule, not cost performance.
- D
Compare the project budget to the actual cost in the project invoice.
Why wrong: Invoices reflect billed amounts, not ongoing cost efficiency.