Cost Performance Index

 

Cost performance index (CPI) provides a direct measure of how well you are doing with regard to cost. It is defined by:

 

          CPI  =  EV / AC

 

where EV is earned value and AC is actual cost.

A CPI of less than 1 indicates a cost overrun. A CPI of greater than 1 indicates a cost underrun.

 

Example

          Budget at completion (BAC)            =  $1000

          % of work completed                      =  60%

          Earned value (EV)                          =  $1000 x 60%  =  $600

          Actual cost (AC)                            =  $750

          Cost performance index (CPI)      =  $600 / $750  =  0.8