 # What is CPI and SPI?

## What is CPI and SPI?

The Cost Performance Index (CPI) is defined as the ratio of Earned Value to Actual Cost, while the Schedule Performance Index (SPI) is defined as the ratio of cumulative Earned Value to cumulative Planned Value (PMI, 2000).

## What does CPI mean?

Consumer Price Index

## When the CPI goes below 1.0 or gradually gets smaller corrective action should not be taken the project is performing well?

When the CPI goes below 1.0 or gradually gets smaller, corrective action should not be taken, the project is performing well. The key to effective cost control is waiting to address negative cost variances and cost inefficiencies after they are identified. It is important to manage the cash flow on a project.

## How is SPI calculated in MS Project?

The SPI (schedule performance index) field shows the ratio of the budgeted cost of work performed to the budgeted cost of work scheduled (BCWP/BCWS). After two days, the budgeted cost of work scheduled (BCWS) is \$50. However, after two days of actual work, 60 percent of the work has been completed, for a cost of \$60.

## How is Earned Value calculated?

The formula to calculate Earned Value is also simple. Take the actual percentage of the completed work and multiply it by the project budget and you will get the Earned Value. Earned Value = % of completed work X BAC (Budget at Completion).

## What is a good schedule performance index?

As a rule of thumb, for Schedule performance index (SPI), EV/PV greater than 1 is good (ahead of schedule), and less than 1 is bad ( behind schedule). Keep this rule in mind, and it will assist you to gauge the speed and efficiency of the project with just these 2 numbers.

## How do you interpret Cost Performance Index?

CPI = 1.0 means the project is on budget. CPI = 2.0 means the project has spent half the amount that it should have at this point….Interpretation of ResultsIf CPI is less than 1, the task is over budget.If CPI is one, the task is on budget.If CPI is greater than 1, the task is under budget.

## What is a performance schedule?

More Definitions of Performance Schedule Performance Schedule means a schedule or other objective method of determining the achievement of a Performance Goal relative to the applicable Performance Target.

## What does a Schedule Performance Index SPI of 0.67 mean?

This means for every \$1 spent, the project is producing only 90 cents in work. Schedule Performance Index (SPI**)** = EV / PV = \$90,000 / \$135,000 = 0.67. This means for every estimated hour of work, the project team is completing only 0.67 hours (approximately 40 minutes).

## What is the purpose of a cost performance index CPI )?

The cost performance index (CPI) is a measure of the financial effectiveness and efficiency of a project. It represents the amount of completed work for every unit of cost spent. As a ratio it is calculated by dividing the budgeted cost of work completed, or earned value, by the actual cost of the work performed.