Certified Supply Chain Professional (CSCP) Practice Exam

What does a schedule variance or cost variance with negative values indicate?

1. Project is ahead of schedule and under budget

2. Project is on track and within budget

3. Project is behind schedule or over budget

4. Project is managed effectively

The correct answer is: Project is behind schedule or over budget

A negative schedule variance or cost variance indicates that the project is experiencing delays or overspending relative to the planned timeline and budget. This means that the work completed and the expenditure incurred so far are less than what was planned at that point in time. It serves as a critical indicator for project managers, alerting them to potential issues that need to be addressed, such as resource allocation or risk management. In project management, a schedule variance is calculated by comparing the actual progress to the planned progress, while a cost variance does the same for expenses. Therefore, negative values in these variances reveal that the project is lagging behind its schedule or exceeding its budget, prompting necessary corrective measures to get back on track and ensure successful project completion.