Posted by: EVMConsulting.Com | June 7, 2010

The Use of TCPI in Evaluating Your EAC

One of the most misused metrics in the EVMS world is TCPI.  What is TCPI you ask?

Well, TCPI is the To Complete Performance Index that can be used for your program’s EAC.  It is a good test of reasonableness for your EAC estimates. The TCPI calculates what efficiency must be attained and maintained for the remainder of the POP (period of performance) if the EAC is to be met.

TCPI indicates the cost efficiency at which work must be performed in the future to remain on track so to speak. Generally a TCPI greater than 1.0 indicates a favorable CV in the future. However, using TCPI without the CPI has little value and that is usually where it is misused. As a stand-alone metric it has little value.

Calculating TCPI=BAC-CUM BCWP/EAC-CUM ACWP

Example:

TCPI=210k-70K/210K-80K = 140K/130K=1.076.

For every dollar of cost, we must earn 1.076 worth of work in order to finish on EAC.

Some examples:

EAC Example #1

CPI (Cum)=0.92, TCPI=0.99, CPI (3-month trend)=0.80 and % complete of the program is 35%

Analysis: Improving efficiency by 7% is ambitious. The EAC is most likely understated. However, it is possible that increased funding could improve the program metrics given the program is only 35% complete.

EAC Example #2

CPI (Cum)=1.00, TCPI=1.00, CPI (3-month trend)=1.22 and % complete of the program is 21%

Analysis: Initially everything looks very good. However, the 3-month trend indicates a favorable cost variance trending forward. It is possible the EAC estimates are overstated based on this data.

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