1. What is Cost Performance Index?

The Cost Performance Index (CPI) is a measure of the cost efficiency of budgeted resources, expressed as a ratio of earned value to actual cost. It indicates how efficiently the project is using its resources.

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 performance)
• CPI = 1: Project is on budget
• CPI < 1: Project is over budget (poor performance)

3. Importance of CPI Calculation

Details: CPI is a key performance indicator in project management that helps assess the cost efficiency of a project and forecast future performance.

4. Using the Calculator

Tips: Enter earned value and actual cost in USD. Both values must be positive numbers.

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: A CPI of 1 or higher indicates favorable cost performance. Values below 1 suggest cost overruns.

Q3: How often should CPI be calculated?
A: Typically calculated during regular project status meetings, often weekly or monthly depending on project duration.

Q4: Can CPI predict final project costs?
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: This indicates chronic cost overruns and may require budget revisions, scope changes, or process improvements.