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
- Assumptions
- Baseline
- Backlog
- BOSCARD
- Burn Rate
- Balance Scorecard
- Business Case
- Contingency Plan
- Case Study
- 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)
- Change Management
- Deliverable
- Dependency
- Earned Value
- Execution Phase
- Extreme Programming (XP)
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- Objectives
- Project Portfolio
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- Planning phase
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- Project
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- Project Manager
- Priority Matrix
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- Risk Mitigation
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- Risk Register
- Scope Statement
- Six Sigma
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- Scheduling
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- Scope Creep
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- Stakeholder
- Timeline
- 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
