What is CPI (cost performance index)?

    The cost performance index shows how much value of work is earned for each dollar spent. Below 1.0 means the work is costing more than budgeted.

    Also written as CPI

    CPI is one of the most watched figures in earned value because it tends to be stable once a project is part way through. A CPI that is poor early rarely recovers on its own.

    Because CPI relies on both progress measurement and cost cut-off, check both before acting on a sudden change.

    Formula

    CPI = EV ÷ AC

    Worked example

    A project has a $12 million budget (BAC). At the reporting date, $5.2 million of work was planned (PV), $4.8 million has been earned (EV) and $4.55 million has been spent (AC). CPI = 4.8 ÷ 4.55 = 1.05: each dollar spent has earned about $1.05 of budgeted work.

    Related terms

    Schedule performance index

    SPI

    Compares the value of work completed with the value planned.

    Formula and example

    Cost variance

    CV

    The difference between the value of work completed and what it actually cost.

    Formula and example

    Estimate at completion

    EAC

    The forecast total cost of the work when it's finished, based on performance so far and what's left to do.

    Formula and example

    To-complete performance index

    TCPI

    The cost performance the remaining work needs to achieve to finish on budget.

    Formula and example
    PreviousSPI (Schedule performance index)NextSV (Schedule variance)

    Building better project controls?

    Strataverra is launching first for EPCM projects, shutdowns and turnarounds. Join the early access list for updates, or see where your team stands with the free assessment.