Cost Performance Index (CPI)
The Cost Performance Index (CPI) is an Earned Value Management (EVM) performance factor metric primarily used as an element of the Earned Value Management (EVM) Estimate at Completion (EAC) equation. It measures the cost efficiency, by dividing the Budgeted Cost for Work Performed (BCWP) by the Actual Cost of Work Performed (ACWP).
CPIs greater than 1.0 are favorable which means the contractor is performing with an efficiency of great than 100%; CPIs less than 1.0 are unfavorable which means the contractor is performing at an efficiency of less than 100%. There should normally never be negative CPIs. Negative CPIs do on occasion occur when accounting adjustments are made. If observed, they should be further investigated.
Schedule Performance Index (CPI)
Schedule Performance Index (SPI) is a ratio of the earned value (EV) to the planned value (PV). It is used to check whether the project is running at the expected rate or behind the schedule or ahead of schedule. Equation: Schedule Performance Index (SPI) = Earned Value ÷ Planned Value.
Scheduled Performance Index = EV ÷ PV
- If SPI value > 1, it indicates that project is going at a faster rate. good
- If SPI value = 1, it indicates that project is going at the same rate as expected.
- If SPI value < 1, it indicates that project is going at a slower rate.