CPI Calculator

The Cost Performance Index (CPI) is the key cost efficiency measure in earned value management. It compares the value of work completed with what that work actually cost. A CPI of 1.0 means you are exactly on budget, above 1.0 means you are getting more work per unit of money than planned, and below 1.0 means you are overspending.

How to use the calculator

1. Enter the Earned Value (EV), the budgeted cost of work actually performed.
2. Enter the Actual Cost (AC) for the same work and period.
3. Optionally enter the Budget at Completion (BAC) to forecast the final cost.
4. Read the CPI, the cost variance and the estimate at completion.

Formulas

• CPI = EV / AC
• Cost variance CV = EV - AC
• Estimate at Completion EAC = BAC / CPI (assumes current efficiency continues)
• Variance at Completion VAC = BAC - EAC

Worked example

A project with BAC = 2,000,000 has EV = 800,000 and AC = 920,000. CPI = 800,000 / 920,000 = 0.87, so every unit of money spent produces only 0.87 units of planned work. CV = -120,000. EAC = 2,000,000 / 0.87 = about 2,300,000, a forecast overrun of about 300,000.

Interpreting CPI

• Research on large projects shows CPI tends to stabilise after about 20% completion and rarely improves much afterwards, so an early low CPI is a strong warning sign.
• Look at CPI per work package, not only the project total, to find where the overrun comes from.
• Combine with SPI to see both cost and schedule performance.