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After the acquisition of the Skillset Inc., the project portfolio was reviewed. During the review it was noted that the Cost Performance index looks like the following: .8, .5, 1.2, .7, .9, 1.0, 1.2, .65, 1.1, and .75. If their policy is to cut any projects underperforming or above planned cost; what percentage of projects will be cut?
75% of the portfolio will be cut
25% of the portfolio will be cut
60% of the protfolio will be cut
40% of the portfolio will be cut
Let's first look at the definition of Cost Performance Index; A value >1 shows under planned cost, a value<1.0 is over planned cost, and a value=1.0 is on planned cost. The number of Projects>1.0 and at 1.0 is 4 while the Projects <1.0 is 6. The total number of projects that will be cut is 6/10=60% (PMBOK 2013 Rev 5th Edition, pgs 217-225).
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