1. What is the Cost Performance Index?

The Cost Performance Index (CPI) is a key performance indicator in project management that measures the cost efficiency of project work. It compares the value of work completed (Earned Value) to the actual costs incurred.

2. How Does the Calculator Work?

The calculator uses the CPI formula:

Where:

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

Explanation: A CPI greater than 1 indicates the project is under budget, while a CPI less than 1 indicates the project is over budget.

3. Importance of CPI Calculation

Details: CPI is crucial for project cost control, budget forecasting, and identifying cost variances early in the project lifecycle.

4. Using the Calculator

Tips: Enter Earned Value and Actual Cost in USD. Both values must be positive numbers greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: What is a good CPI value?
A: A CPI value of 1.0 or higher is generally considered good, indicating the project is on or under budget.

Q2: How often should CPI be calculated?
A: CPI should be calculated regularly throughout the project, typically during each reporting period or milestone.

Q3: What's the difference between CPI and SPI?
A: CPI measures cost efficiency while SPI (Schedule Performance Index) measures schedule efficiency.

Q4: Can CPI be negative?
A: No, CPI cannot be negative since both EV and AC are positive values. However, it can be less than 1.

Q5: How is CPI used in forecasting?
A: CPI is used to forecast the Estimate at Completion (EAC) and helps predict the final project cost.