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What does a CPI of 1.2 and an SPI of 0.75 indicate about a project?

  1. Over-budget and behind schedule.

  2. Under-budget and behind schedule.

  3. Over-budget and ahead of schedule.

  4. Under-budget and ahead of schedule.

The correct answer is: Under-budget and behind schedule.

A CPI (Cost Performance Index) of 1.2 indicates that the project is performing well in terms of costs, as a CPI above 1 signifies that less money is being spent than planned for the work accomplished. Conversely, an SPI (Schedule Performance Index) of 0.75 indicates that the project is behind schedule, since an SPI below 1 shows that the project is not progressing as quickly as planned. Putting these two indicators together, the CPI of 1.2 confirms the project is under-budget, while the SPI of 0.75 indicates that it is behind schedule. Therefore, the correct interpretation is that the project is under-budget and behind schedule, aligning with the selected option.