PMP Formula: Cost Performance Index

PMP Formula Cost Performance Index

Cost Performance Index (CPI) is a measure of the cost efficiency of budgeted resources, expressed as a ratio of earned value to actual cost. It is considered the most critical EVA metric and measures the cost efficiency for the work completed. A CPI value of less than 1.0 indicates a cost overrun for work completed. A CPI value greater than 1.0 indicates a cost underrun of performance to date. The CPI is equal to the ratio of the EV to the AC. Equation: Cost Performance Index = (Earned Value) ÷ (Actual Cost)

Formula Definition
CPI Cost Performance Index
  • = EV ÷ AC

  • Cost Peformance Index Values > 1 are considered good
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