Cost Performance Index Calculator

Formula

The formula to calculate the Cost Performance Index (CPI) is:

\[ \text{CPI} = \frac{\text{EV}}{\text{AC}} \]

Where:

$\text{CPI}$ is the Cost Performance Index
$\text{EV}$ is the Earned Value ($)
$\text{AC}$ is the Actual Cost Incurred ($)

What is a Cost Performance Index?

A Cost Performance Index (CPI) is a ratio of the earned value to the actual cost of a company's business campaign, project, etc. It is used to measure the cost efficiency of a project. A CPI greater than 1 indicates that the project is under budget, while a CPI less than 1 indicates that the project is over budget.

Example Calculation

Let's consider an example:

Earned Value (EV): $50,000
Actual Cost Incurred (AC): $45,000

Using the formula to calculate the Cost Performance Index:

\[ \text{CPI} = \frac{50,000}{45,000} \approx 1.11 \]

This means that the Cost Performance Index (CPI) is approximately 1.11, indicating that the project is under budget.