What is the Cost Performance Index (CPI)?
The Cost Performance Index (CPI) is a method for calculating the cost efficiency and financial effectiveness of a specific project through the following formula:
CPI = earned value (EV) / actual cost (AC).
A CPI ratio with a value higher than 1 indicates that a project is performing well budget-wise. A CPI value of 1 indicates that a project is performing on budget. A CPI value that is less than 1 indicates that a project is over budget.
Further Reading:
– A Complete Guide to Deliverables in Project Management
– Dependencies in Project Management – A Complete Guide
– How to Effectively Track Project Progress for Success?
– How to Stay Organized at Work – 9 Simple Steps
All Terms
- Acceptance Criteria
- Adaptive Project Framework (APF)
- Aggregate Project Plan (APP)
- Agile
- Artifact
- Backlog
- Burn Rate
- Constraint
- CAPEX (Capital Expenditure)
- Change control
- Change freeze
- Change management plan
- Change request
- Closing Phase
- Communications Management Plan
- Cost Management Plan
- Cost Overrun (Budget overrun)
- Cost Performance Index (CPI)
- Critical Chain Project Management (CCPM)
- Critical Path
- Critical Path Method (CPM)
- Deliverable
- Dependency
- Execution Phase
- Extreme Programming (XP)
- Feasibility study
- Gantt Chart
- Human Resource Plan
- Initiation phase
- Iteration
- Just in Time (JIT)
- Kanban
- Kickoff Meeting
- Key Performance Indicator (KPI)
- Lead Time
- Lean Production
- Milestone
- Net present value (NPV)
- Objectives
- Planning phase
- PRINCE2 (PRojects IN Controlled Environments)
- Project
- Project Manager
- Quality Assurance (QA)
- Quality Control (QC)
- Risk
- Risk Register
- Schedule Management Plan
- Scheduling
- Scope
- Scope Creep
- Scrum
- Sprint
- Stakeholder
- Test
- Use Case
- User Acceptance Test (UAT)
- Virtual Teams
- Value stream mapping
- Work Breakdown Structure (WBS)
- Workaround
- Waterfall Methodology
- X-bar control chart
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What is the Cost Performance Index (CPI)?
The Cost Performance Index (CPI) is a method for calculating the cost efficiency and financial effectiveness of a specific project through the following formula:
CPI = earned value (EV) / actual cost (AC).
A CPI ratio with a value higher than 1 indicates that a project is performing well budget-wise. A CPI value of 1 indicates that a project is performing on budget. A CPI value that is less than 1 indicates that a project is over budget.
Further Reading:
– A Complete Guide to Deliverables in Project Management
– Dependencies in Project Management – A Complete Guide
– How to Effectively Track Project Progress for Success?
– How to Stay Organized at Work – 9 Simple Steps
