TCPI is to calculate the cost performance to be achieved in order to meet the project goals. The ratio of remaining work to be completed with remaining budget provides the TCPI.
To calculate TCPI first we need to calculate the EVM (Earned Value Management) and then based on AC (Actual Cost) , EV (Earned Value) we can calculate TCPI. TCPI is calculated under two conditions one with original budget and the other with new budget.
TCPI=(BAC-EV)/(BAC-AC)—With planned budget
TCPI=(BAC-EV)/(EAC-AC)—With new budget
BAC = Budget at completion
The ratio should be ideally 1. If it greater than 1, then difficult to complete and if less than 1 easier to complete.
TCPI is used as a technique under the process Control Costs.