Earned Value: SPI and CPI Root Cause Analysis for PMP
A project manager is reviewing the earned value report. The SPI is 0.85 and the CPI is 0.90. The project is behind schedule and over budget. Several team members are working overtime to catch up. What should the PM do FIRST?
Quick Answer
The correct first step is to conduct a root cause analysis of the cost and schedule variances. This is because earned value analysis metrics like SPI (0.85) and CPI (0.90) are lagging indicators that reveal a problem exists, but they do not explain why the project is behind schedule and over budget. Before any corrective action—such as authorizing more overtime or requesting additional funds—a project manager must perform a root cause analysis to identify the underlying drivers of the poor performance. On the PMP exam, this scenario tests your understanding of the Control Costs and Control Schedule processes, specifically that analysis precedes action. A common trap is jumping to solutions like overtime or crashing the schedule without first diagnosing the variance’s source. Remember the memory tip: “Diagnose before you prescribe—SPI and CPI tell you what, root cause analysis tells you why.”
⚠ Common exam trap
The trap here is that candidates may jump to a corrective action like requesting more budget or rebaselining without first analyzing the variances, but the PMBOK emphasizes that the first step after identifying a variance is to analyze its cause to determine the appropriate response.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Conduct a root cause analysis of the cost and schedule variances
The SPI of 0.85 and CPI of 0.90 indicate the project is both behind schedule and over budget. Before taking corrective action like requesting more budget or rebaselining, the PM must first understand why the variances occurred. Conducting a root cause analysis (B) aligns with the PMBOK's principle of analyzing performance data to identify the underlying issues, ensuring that any subsequent corrective or preventive actions are targeted and effective.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Mandate mandatory overtime for all team members
Why it's wrong here
Overtime can lead to burnout and further quality issues; it's not a first step.
- ✓
Conduct a root cause analysis of the cost and schedule variances
Why this is correct
Understanding the cause of variances is the first step to determining appropriate corrective actions.
- ✗
Request additional budget from the sponsor
Why it's wrong here
Requesting more budget without analysis may not solve the underlying issues.
- ✗
Rebaseline the project schedule and budget
Why it's wrong here
Rebaselining should only be done after approved changes; it is not a first step.
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Same concept, more angles
1 more way this is tested on PMP
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. A team member reports that a task is 50% complete but has consumed 70% of the budget. Which metric indicates that the project is over budget?
easy- A.Budget at Completion (BAC)
- ✓ B.Cost Performance Index (CPI)
- C.Estimate at Completion (EAC)
- D.Schedule Performance Index (SPI)
Why B: The Cost Performance Index (CPI) is the metric that directly compares the value of work performed (Earned Value) to the actual cost incurred. A CPI less than 1.0 indicates that the project is over budget, as it costs more than planned to achieve the work completed. In this scenario, with 50% of the work done but 70% of the budget spent, the CPI would be 0.5/0.7 ≈ 0.71, confirming a cost overrun.
JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This PMP practice question is part of Courseiva's free PMI certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the PMP exam.