1. What is Cost Performance Index (CPI)?

The Cost Performance Index (CPI) is a measure of the cost efficiency of budgeted resources in project management. It represents the ratio of earned value (EV) to actual cost (AC).

2. How Does the Calculator Work?

The calculator uses the CPI formula:

Where:

• \( EV \) — Earned Value (USD)
• \( AC \) — Actual Cost (USD)

Interpretation:

• CPI > 1: Project is under budget (good)
• CPI = 1: Project is on budget
• CPI < 1: Project is over budget (bad)

3. Importance of CPI Calculation

Details: CPI is a key performance indicator in project management that helps assess whether a project is performing within its budget constraints. It's used for cost control and forecasting.

4. Using the Calculator

Tips: Enter both EV and AC in USD. Both values must be positive numbers. The calculator will show the CPI ratio.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between CPI and SPI?
A: CPI measures cost efficiency (EV/AC), while SPI (Schedule Performance Index) measures schedule efficiency (EV/PV).

Q2: What is a good CPI value?
A: Typically, a CPI of 1 or higher is desirable, indicating the project is on or under budget.

Q3: How often should CPI be calculated?
A: CPI should be calculated regularly (weekly or monthly) as part of project performance monitoring.

Q4: Can CPI predict final project cost?
A: Yes, when combined with other metrics, CPI can help forecast the Estimate at Completion (EAC).

Q5: What if my CPI is consistently below 1?
A: A consistently low CPI indicates cost overruns and may require corrective actions like budget review or scope adjustment.