What does a CPI greater than 1 indicate about a project?

A Cost Performance Index (CPI) greater than 1 signifies that a project is performing well in terms of its budget relative to its earned value. Specifically, a CPI of greater than 1 indicates that the value of the work completed is greater than the actual costs incurred. This suggests that the project is cost-effective, meaning that it is generating more value for each dollar spent.

In project management, a CPI is calculated by dividing the earned value (the value of the work actually performed) by the actual cost (the costs that have been incurred). When this ratio exceeds 1, it demonstrates that the project is within budget and is effectively utilizing resources to deliver results.

This metric is critical in project management as it allows for ongoing assessment of a project's financial health, enabling adjustments to be made if necessary to maintain or enhance efficiency and effectiveness.