CPI and SPI Explained: PMP Cost and Schedule Performance

CPI and SPI: The Two Numbers Every Project Manager Must Know

If a stakeholder asks you one question about your project's health, you should be ready to answer with two numbers: CPI and SPI. The Cost Performance Index and Schedule Performance Index compress a project's entire financial and timeline story into single ratios that even non-technical executives can understand. For the PMP exam, CPI and SPI are not optional knowledge — they appear in scenario questions, formula chains, and situational judgment items alike.

Defining CPI: Cost Performance Index

CPI measures how efficiently the project is using its budget. The formula is straightforward:

CPI = Earned Value (EV) / Actual Cost (AC)

A CPI of 1.0 means you are exactly on budget. Above 1.0 means you are under budget — you are getting more value per dollar than planned. Below 1.0 means you are over budget — each dollar buys less than a dollar of value.

What CPI Tells Stakeholders

CPI is a multiplier. A CPI of 0.80 means that for every dollar spent, the project produces only 80 cents of planned value. Conversely, a CPI of 1.15 means each dollar spent produces $1.15 of value. Research on large government projects has shown that once CPI drops below 0.80, recovery to 1.0 is virtually impossible without scope reduction. The PMP exam references this principle in questions about when to escalate or recommend project termination.

Defining SPI: Schedule Performance Index

SPI measures how efficiently the project is using time. The formula mirrors CPI:

SPI = Earned Value (EV) / Planned Value (PV)

An SPI of 1.0 means on schedule. Above 1.0 means ahead of schedule. Below 1.0 means behind schedule.

The Limitation of SPI

SPI has a known weakness: as a project approaches completion, SPI converges toward 1.0 regardless of actual schedule performance. This happens because EV approaches BAC and PV also approaches BAC, making the ratio approach 1.0. The Earned Schedule (ES) method addresses this limitation, and while it rarely appears on the PMP exam, understanding the limitation itself is testable.

Interpreting CPI and SPI Together

The real power of these indexes comes from reading them in combination. The PMP exam tests this through scenario questions:

CPI > 1.0, SPI > 1.0: Under budget and ahead of schedule. The project is in an ideal state.
CPI < 1.0, SPI > 1.0: Over budget but ahead of schedule. The team may be spending more to accelerate — a deliberate crashing strategy or an inefficiency.
CPI > 1.0, SPI < 1.0: Under budget but behind schedule. Resources may be underallocated or the team is being too conservative.
CPI < 1.0, SPI < 1.0: Over budget and behind schedule. The project is in trouble and requires immediate corrective action.

How CPI and SPI Feed Other Formulas

CPI and SPI are not endpoints — they are inputs to forecasting formulas that the PMP exam tests extensively:

EAC = BAC / CPI uses CPI to forecast total project cost assuming current efficiency continues.
EAC = AC + (BAC − EV) / (CPI × SPI) uses both indexes when schedule pressure affects cost.
TCPI = (BAC − EV) / (BAC − AC) tells you what CPI you need going forward to meet the original budget.

The exam loves chain calculations: given PV, EV, and AC, calculate CPI, then use CPI to find EAC, then calculate VAC. Practice these chains until they are automatic.

Common PMP Exam Traps with CPI and SPI

Confusing which index uses which denominator: CPI divides by AC (cost); SPI divides by PV (plan). The denominator matches the index name's focus.
Misreading "favorable" as "greater than": For CPI and SPI, greater than 1.0 is always favorable. For variances (CV, SV), positive is favorable. Do not mix these conventions.
Assuming CPI predicts schedule: CPI only measures cost efficiency. A project can have a perfect CPI of 1.0 and be critically behind schedule.

Practice Scenario

Your project has BAC = $200,000. At the status date: EV = $80,000, AC = $95,000, PV = $90,000.

CPI = $80,000 / $95,000 = 0.842 — over budget
SPI = $80,000 / $90,000 = 0.889 — behind schedule
EAC = $200,000 / 0.842 = $237,530

Both indexes are below 1.0, signaling a project in distress. The project manager should perform root cause analysis and present corrective options to the sponsor.

Build confidence with CPI and SPI by running through dozens of scenario-based practice questions. Visit our topic review pages for targeted EVM drills, or create your free account to access full-length practice exams.