1. What is the Cost Performance Index (CPI)?

The Cost Performance Index (CPI) is a key metric in project management that measures the cost efficiency of a project. 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 (dollars)
• \( AC \) — Actual Cost (dollars)

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 managers to monitor cost performance, make informed decisions about resource allocation, and forecast project completion costs.

4. Using the Calculator

Tips: Enter Earned Value and Actual Cost in dollars. 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 lifecycle, typically during weekly or monthly project reviews.

Q3: Can CPI be used to forecast project completion costs?
A: Yes, CPI can be used with the Estimate at Completion (EAC) formula to forecast total project costs.

Q4: What's the difference between CPI and SPI?
A: CPI measures cost efficiency while SPI (Schedule Performance Index) measures schedule efficiency.

Q5: What should I do if my CPI is below 1.0?
A: Investigate the causes of cost overruns, review project expenditures, and implement corrective actions to improve cost performance.