Cost Performance Index
Cost efficiency metric. Above 1.0 = under budget.
CPI = BCWP ÷ ACWP
Schedule Performance Index
Schedule efficiency. Above 1.0 = ahead of schedule.
SPI = BCWP ÷ BCWS
Cost Variance
Positive = under budget.
CV = BCWP − ACWP
Schedule Variance
Positive = ahead of schedule.
SV = BCWP − BCWS
Variance at Completion
Forecasts final budget outcome.
VAC = BAC − EAC
How It Works
Earned Value Management tracks cost and schedule performance by comparing planned work, completed work, and actual spending. CPI, SPI, CV, SV, and VAC indicate budget and schedule health.
Example Problem
BCWP = $50,000 and ACWP = $55,000. What is CPI?
- CPI = 50,000 / 55,000 = 0.91
- CPI < 1 means over budget — only $0.91 of value per $1 spent.
When to Use Each Variable
- Solve for CPI — when you know BCWP and ACWP and need to assess cost efficiency — e.g., a monthly project health review.
- Solve for SPI — when you know BCWP and BCWS and need to assess schedule efficiency — e.g., determining if a construction project is behind schedule.
- Solve for CV — when you need the dollar amount of budget variance — e.g., reporting cost overruns to stakeholders.
- Solve for SV — when you need the dollar amount of schedule variance — e.g., quantifying how far behind a project is in earned-value terms.
- Solve for VAC — when you have BAC and EAC and need to forecast the final budget outcome — e.g., mid-project budget reforecasting.
Key Concepts
Earned Value Management (EVM) integrates scope, schedule, and cost into a single framework. BCWP (earned value) is the budgeted cost of work actually completed. ACWP is what was actually spent. BCWS is what was planned to be spent by now. Ratios (CPI, SPI) indicate efficiency, while variances (CV, SV, VAC) show dollar amounts of deviation. A CPI or SPI below 1.0 signals trouble; above 1.0 indicates favorable performance.
Applications
- Government contracting: US DoD and federal agencies require EVM reporting on contracts over $20M
- Construction management: tracking cost and schedule performance across multiple subcontractors
- Software development: measuring sprint-level earned value to forecast project completion dates
- Capital projects: oil and gas, infrastructure, and aerospace programs use EVM for portfolio oversight
Common Mistakes
- Confusing BCWP with BCWS — BCWP is what you earned (work completed), BCWS is what you planned to earn by now
- Interpreting SPI as calendar time — SPI measures earned schedule efficiency in dollar terms, not actual days ahead or behind
- Assuming CPI will improve later in the project — historical data shows CPI rarely improves by more than 10% after 20% completion
- Forgetting that VAC is only meaningful when EAC is a credible re-estimate, not just BAC divided by CPI
Frequently Asked Questions
What does a CPI of 0.8 mean?
Only $0.80 of value per $1.00 spent. 20% over budget.
What is the difference between CPI and SPI?
CPI measures cost efficiency; SPI measures schedule efficiency. A project can be under budget but behind schedule.
When should I use Variance at Completion?
For mid-project forecasting. Positive VAC = under budget; negative = overrun.
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.
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