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Cost Performance Index (CPI)

What is Cost Performance Index (CPI)?

Cost Performance Index (CPI) is a project management metric used to measure the cost efficiency of a project. It is calculated by dividing the total earned value of a project by its total actual cost. The CPI is expressed as a ratio, and it can be used to determine whether or not a project is on track in terms of budget and cost.

How to Calculate Cost Performance Index (CPI)?

The formula for calculating CPI is: CPI = Earned Value / Actual Cost. The earned value is the total amount of money that has been spent on the project so far, while the actual cost is the total amount of money that was originally budgeted for the project. By dividing these two values, you can get an indication of how efficiently the project is being managed in terms of costs.

Uses of Cost Performance Index (CPI)

The CPI can be used to identify areas where costs are running over budget, and it can also be used to compare different projects in terms of their cost efficiency. It can also be used to forecast future costs and budgets for projects, as well as to assess the overall performance of a project manager or team.