The to-complete performance index (TCPI) is the calculated projection of cost performance that must be achieved on the remaining work to meet a specified management goal, such as the BAC or the EAC. If it becomes obvious that the BAC is no longer viable, the project manager develops a forecasted estimate at completion (EAC). Once approved, the EAC effectively supersedes the BAC as cost performance goal. Formula for the TCPI based on the BAC: (BAC - EV) / (BAC - AC).
The TCPI is conceptually displayed in Figure 7-6. The formula for the TCPI is shown in the lower left as the work remaining (defined as the BAC minus the EV) divided by the funds remaining (which can be either the BAC minus the AC, or the EAC minus the AC).
If the cumulative CPI falls below the baseline plan (as shown in Figure 7-6), all future work of the project will need to immediately be performed in the range of the TCPI (BAC) (as reflected in the top line of Figure 7-6) to stay within the authorized BAC. Whether this level of performance is achievable is a judgment call based on a number of considerations, including risks, schedule, and technical performance. Once management acknowledges that the BAC is no longer attainable, the project manager will prepare a new estimate at completion (EAC) for the work, and once approved, the project will work to the new EAC value. This level of performance is displayed as the TCPI (EAC) line. The formula for the TCPI based on the EAC: (BAC - EV) / (EAC-AC).
Was this article helpful?
What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.