What is Cost Performance Index (CPI)?

The Cost Performance Index (CPI) is a report card that indicates how successfully you manage your project budget. Assume you’re working on a large school project with a limited budget. Things are going well financially if your CPI is 1 or above. It signifies you’re spending your money well; for every dollar spent, you’re getting at least a dollar’s worth of work done. If your CPI is less than one, you’ve spent more money than you planned for the quantity of labor done. As a result, the closer your CPI is to one, the better you manage your project’s budget.