Which of the following is true for Cost Performance Index (CPI)?
A.
If the CPI > 1, it indicates better than expected performance of project
B.
CPI = Earned Value (EV) * Actual Cost (AC)
C.
It is used to measure performance of schedule
D.
If the CPI = 1, it indicates poor performance of project
Explanation:
Cost performance index (CPI) is used to calculate performance efficiencies of project. It is used in
trend analysis to predict future performance. CPI is the ratio of earned value to actual cost.
If the CPI value is greater than 1, it indicates better than expected performance, whereas if the
value is less than 1, it shows poor performance.
Answer C is incorrect. Cost performance index (CPI) is used to calculate performance efficiencies
of project and not its schedule.
Answer B is incorrect. CPI is the ratio of earned value to actual cost, i.e., CPI = Earned Value
(EV) / Actual Cost (AC).
Answer D is incorrect. The CPI value of 1 indicates that the project is right on target.