The cost performance index, also referred to by the abbreviation (CPI), refers specifically to a method, chart, or other instrument that is implemented for the purposes of determining/measuring the actual cost efficiency of a project. The cost performance index is determined by measuring the ratio of earned value (also known by the abbreviation of EV) to actual costs (also known by the abbreviation of AC).The equation to determine the cost performance index can be derived by the following equation: CPI=EV divided by AC. If the resulting value is greater than one indicates that the conditions of cost efficiency for the project are considered to be favorable. A resulting value that is less than one indicates that the conditions of cost efficiency for the project are considered to be less than favorable. The cost performance index can change over the life of a project depending on the ways in which the earned values and actual cost have changed.

This term is defined in the 3rd and the 4th edition of the PMBOK.

Related Entries:

 

  • Schedule Performance Index The Schedule Performance Index is a measure of project efficiency given by Project Management to gauge the progress and efficiency....
    •  
  • Cost-Plus-Percentage of Cost (CPPC) See cost-plus-fee. This term is defined in the 3rd and the 4th edition of the PMBOK....
    •  
  • Performance Reporting Effectively managing a project is a many layered process and effort, and there are a number of components that need...
    •  
  • Performance Reports Effectively managing a project is a many layered process and effort, and there are a number of components that need...
    •  
  • Performance Maintenance Baseline In regards to the area of project management, it is essential when attempting to effectively and properly determine how much...