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How It Works
Earned Value Management (EVM) tracks a project’s cost and schedule performance by comparing planned work, completed work, and actual spending. The five key metrics—CPI, SPI, CV, SV, and VAC—tell you whether you are on budget, on schedule, and what the forecast looks like at completion.
Example Problem
A project has BCWP = $50,000 and ACWP = $55,000. What is the CPI?
- CPI = BCWP / ACWP = 50,000 / 55,000 = 0.91
- Since CPI < 1, the project is over budget—for every $1 spent, only $0.91 of value was earned.
Frequently Asked Questions
What does a CPI of 0.8 mean?
A CPI of 0.8 means the project is getting only $0.80 of value for every $1.00 spent. It is 20% over budget and will likely need corrective action or additional funding to finish.
What is the difference between CPI and SPI?
CPI measures cost efficiency (budget vs. actual spend), while SPI measures schedule efficiency (planned progress vs. actual progress). A project can be under budget (CPI > 1) but behind schedule (SPI < 1) at the same time.
When should I use Variance at Completion?
VAC is useful during mid-project reviews to forecast the final budget outcome. A positive VAC means you expect to finish under budget; negative VAC signals a projected overrun. Project managers often report VAC alongside CPI in monthly status updates.
Related Calculators
- Percent Difference Calculator — compare two budget estimates side by side.
- Percent Error Calculator — measure how far an estimate deviated from the actual value.
- Risk Equations Calculator — quantify project risk with probability and impact analysis.
- Profitability Index Calculator — evaluate project viability using cost and benefit ratios.