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Cost Performance Index

Cost Performance Index (CPI)

EVM Terms Reviewed by forProject Technology - updated Sep 2026
Quick definition: Cost Performance Index (CPI) is a measure of cost efficiency, calculated as the ratio of earned value (BCWP) to actual cost (ACWP). CPI can be calculated both for the current period and cumulative to date.

CPI shows how efficiently work is being accomplished for the money spent, expressed as BCWP divided by ACWP. A CPI above 1.0 means the project is spending less than the value of work completed (a favorable underrun); below 1.0 means it's spending more (an unfavorable overrun).

Why it matters

CPI is one of the most closely watched EVM metrics because it helps to identify areas that require management attention. It is a strong early predictor of final cost outcomes and a key input to forecasting the Estimate to Complete (ETC).

Also known as
N/A
Used in
Estimate to Complete (ETC); Estimate at Completion (EAC); TCPI-EAC comparison against cumulative CPI

FAQ

What does a CPI of 1.0 mean?
It means the project is spending exactly what was planned for the work completed — cost performance is exactly on target.
Is a CPI above 1.0 always good news?
Generally yes, since it means work is costing less than budgeted, but an unusually high CPI can also signal an overly generous original budget rather than great performance.
Definition maintained by forProject Technology.
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