How to Calculate COST PERFORMANCE INDEX (CPI) For the Project Management Exam
Cost Performance Index shows how much value you are getting for each dollar spent on the project
The Cost Performance Index is calculated as follows:
Cost Performance Index = Earned Value / Actual Cost
Tips – Earned Value is also known as Budgeted Cost of Work Performed (BCWP). And Actual Cost is also known as Actual Cost of Work Performed (ACWP).
So you may see the formula written as – Cost Performance Index = BCWP / ACWP
Now, it time for an example
How did we calculate this?
Well we know that Cost Performance Index = Earned Value / Actual Cost.
The Earned Value is $405,000.
Tip – the PMP exam may use slightly different descriptions to describe the inputs to a formula. This is to test your knowledge and make sure you understand what you are calculating. EG “estimated value of the work completed by the project so far” is another way of saying Earned Value.
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