Category: Project Management Professional (PMP)® Exam using A Guide to the Project Management Body of Knowledge (PMBOK® Guide)

Cost Performance Index VS Schedule Performance Index

Figuring out the Difference Between Cost Performance Index and Schedule Performance IndexPreparing for the Project Management Professional (PMP)® Exam means that you must understand Earned Value and how the various indicators and indices are calculated. Many PMP® Exam sample questions will test you on these:

Cost Performance Index (CPI) and Schedule Performance Index (SPI) are both methods to measure the efficiency of a project. The difference between the two is one measures cost while the other measures the schedule. Using these two in conjunction with each other allows a project manager to forecast final project completion estimates. Will a project be within budget, on time, or both?

CPI measures the cost efficiency of a project, is the budget being spent as planned? In order to calculate CPI you need two pieces of information, the earned value and the actual cost.To calculate CPI, earned value is divided by actual cost (CPI=EV / AC). There are three possible results when calculating CPI: 1, which is good and means funds are being used as planned; >1 which is also good and means the funds are being used more efficiently than planned; and <1 which is bad and means the funds are being over spent.

SPI measures the schedule performance of a project, is the project schedule being performed as planned? In order to calculate SPI you need two pieces of information, the earned value and the planned value. SPI is calculated by dividing the earned value by the planned value (SPI=EV / PV). There are three possible results when using the SPI formula: 1, which is good and shows the project is progressing as planned; >1 which is also good and shows the project is progressing at a faster rate than planned; and <1 which is bad and shows the project is progressing at a slower rate than planned.

The thing to remember is CPI is the measurement of the budget efficiency and SPI is the measurement of the schedule efficiency. Both are valuable in understanding the efficiency of a project and to forecast the project final completion estimates.

A Guide to the Project Management Body of Knowledge (PMBOK® Guide) discusses both Cost Performance Index and Schedule Performance Index in sections 7.4.2.1, & 7.4.2.2

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