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TOPIC: Using Run Chart for Cost Variance Analysis

Using Run Chart for Cost Variance Analysis 1 year 8 months ago #12595

  • Zachary Fisher
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I came across a question in this website's PMP Exam Simulator that I can't seem to understand. I've attached the question. My conundrum is basically this: In studying, I've drilled into my head that positive CV reflects good cost performance (and the bigger positive CV value, the better) and yet the correct answer to this question is that cost performance is improving because CV is decreasing (to a smaller positive value) and the trend has negative slope. While the graphic made clear the trend has a negative slope and that cost variance is decreasing, I took the decreasing positive CV value to be indicative of worsening cost performance. As there was no answer that reflected my thinking, I just guessed (D).

Can someone explain to me why a decreasing positive CV could indicate improving cost performance or explain where I'm going wrong here?

Many thanks!
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