What is the formula for Cost Performance Index (CPI)?

What is the formula for Cost Performance Index (CPI)?

• A. EV/AC
• B. EV/PV
• C. AC/EV
• D. PV/EV

Answer: (A)

CPI measures cost efficiency in earned value management by comparing the value of work actually performed to the actual cost incurred. The formula is earned value divided by actual cost. Interpreting it, a CPI greater than one means you’re getting more value per dollar than planned (under budget for the work done), while a CPI less than one indicates you’re costlier than the value of the work completed (over budget). The ratio EV/PV is the Schedule Performance Index, not CPI; AC/EV is the reciprocal of CPI; and PV/EV isn’t used for standard cost performance—EV/PV is the related schedule metric.

CPI measures cost efficiency in earned value management by comparing the value of work actually performed to the actual cost incurred. The formula is earned value divided by actual cost. Interpreting it, a CPI greater than one means you’re getting more value per dollar than planned (under budget for the work done), while a CPI less than one indicates you’re costlier than the value of the work completed (over budget). The ratio EV/PV is the Schedule Performance Index, not CPI; AC/EV is the reciprocal of CPI; and PV/EV isn’t used for standard cost performance—EV/PV is the related schedule metric.