Cost Performance Index (CPI) Glossary Definition

Term Cost Performance Index (CPI)
Definition

Cost Performance Index (CPI) is an earned-value ratio that compares earned value with actual cost.

Context & Usage

A CPI below 1.0 usually indicates cost inefficiency, while a CPI above 1.0 indicates more value earned per dollar spent.

Project managers, sponsors, and project-controls staff use this concept in budget reviews, performance reporting, forecasting, and variance conversations.

Related concepts include Budget, Cost Baseline, Planned Value, Earned Value, Actual Cost and Cost Variance.

Categories Knowledge Management and Content Governance