Historical review of cost performance index stability.
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Authors
Mitchell, Robby J.
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Date of Issue
2007-06
Date
Publisher
Monterey, California. Naval Postgraduate School
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Abstract
The focus of this study is to determine when the cumulative Cost Performance Index (CPIcum) stabilizes for different contract characteristics. The CPI is the relationship between the budgeted costs for work performed divided by the actual costs of work performed. Once the CPIcum stabilizes, program managers and analyst are able to use this index as a predictor in estimating the final cost of the contract. The range method and the narrowing interval method were used to test for CPIcum stability at the 50% complete point. For the range method, stability was declared if the range, which is the maximum CPIcum value minus the minimum CPIcum value over a specified interval, was less than or equal to .20. The results for the range method indicated that the CPIcum was stable at the 50% complete point. Further analysis showed that the CPIcum was stable as early as the 10% to 20% complete point. For the narrowing interval method, stability was declared when the variance of the CPIcum is less than or equal to plus or minus .10 over a specified percent complete interval. The results for this method indicated that the CPIcum could only be declared stable from the 50% complete point.
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Thesis
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Naval Postgraduate School (U.S.)
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Format
xiv, 73 p. ;
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Approved for public release; distribution is unlimited.
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This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.