How to Calculate Cost Performance Index (CPI) For the Project Management Exam

Home Forums Official Forum- Navsingh Information Technology Project Management How to Calculate Cost Performance Index (CPI) For the Project Management Exam

This topic contains 1 reply, has 1 voice, and was last updated by  Nav Singh 2 years, 3 months ago.

  • Author
    Posts
  • #2833 Reply

    Nav Singh
    Keymaster

    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.

    The Actual Cost is $325,000.

    Knowing this we can calculate:

    Cost Performance Index= $405,000 / $325,000 = 1.25

    That wasn’t too hard to calculate, right?

    Good luck with exam give a like or share if the explanation helped you

  • #2834 Reply

    Nav Singh
    Keymaster

    Good Luck with Exam

Reply To: How to Calculate Cost Performance Index (CPI) For the Project Management Exam
Your information:




Official Forum

This is the Official Forum of Navsingh a community that helps you find answers to all of your problems,they can be Java/programming,wordpress,android, android programming, seo related or technology related