Cost Performance Index

Cost Performance Index

Cost Performance Index Jonathan Poland

Cost Performance Index (CPI) is a project management metric that measures the efficiency of project cost management. It is calculated by dividing the actual cost of a project by the budgeted cost of the project.

For example, if the actual cost of a project is $100,000 and the budgeted cost was $120,000, the CPI would be calculated as follows:

CPI = Actual Cost / Budgeted Cost = $100,000 / $120,000 = 0.83

A CPI of 1.0 indicates that the project is on track to be completed within budget. A CPI greater than 1.0 indicates that the project is under budget, while a CPI less than 1.0 indicates that the project is over budget.

CPI is an important metric for project managers and stakeholders to track, as it provides insight into the efficiency of project cost management and the likelihood of the project being completed within budget. By monitoring CPI, project managers can identify and address any cost overruns or inefficiencies early in the project, which can help to minimize the impact of these issues and improve the chances of project success.

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