At division project status meeting, a dashboard of cost metrics for each project is distributed to all attendees, and each project manager is presenting the status of their project. The metrics for one project show a BAC of $1100, an EV of $998, and a EAC of $1099. However the project manager is reporting an ETC of $354 in her presentation. What do you do?
Notify the appropriate management there is a budgeting error.
Nothing.
Advise the project manager to take the additional funds from her project contingency budget.
Congratulate the project manager for being under budget.
Hi sspawer, i think by using AC=354, u are agreeing that the value given by the PM is correct. Pls take a llok at it because I don't think it is correct calculation.
I think the Answer is A, In this situation every one is circulated with BAC ,EV and EAC and the PM it reporting a different ETC. This question is more towards Social and Etihical Reponsibilities rather than an EVM question.
As per PMIsm, This is not a Law or Ethics Breach, So we should inform the PM about the error as a first step.
This is from Scordo. I made this wrong too and tried to get the analysis from this discussion. This is what I think:
Work remaining = 1100-998 = 102
Since EAC is less than BAC (1099<1100), CPI should be greater than 1 (project is performing more than planned). In this scenario the ETC should be less than the work remaining. However ETC in question is 345 > 102.
Not sure if we would think beyond the formula to answer correctly.
- First don't asume that ETC is Ok, that's what we have to verify.
- Without too much math AC = EV = 998, why? because if your EV is 998, and the question doen's indicate that something exceptional has happened with the project cost, it means that you have already spend 998 to complete the current work (EV).
- Now if BAC = 1100, EAC = 1099 (difference of only $1) and AC = 998, ETC can not be 354
- ETC should be 102 or 101: BAC - AC = 102 or EAC - AC = 101.
That's why we can say that there is an error on what the PM has reported.
BTW, those answer that mention ESTIMATE variation range or ROM of +/- 50% this estimates are comons during initiating phase (also they are asumming that the ETC reported by the PM is Ok). If PM is reporting a budget forcast, the project should be in execution, when the variation in budget should be +/- 10, so
guptaab1
Thu, 11/29/2012 - 10:08
Permalink
Please help on EV question
Answer is "Congratulate the PM for being under budget".
ETC=EAC-AC
hence AC is $745 which is less than EV, thus the PM is under budget.
peeyushm
Fri, 01/25/2013 - 04:25
Permalink
How did you get AC = 745.
How did you get AC = 745.
sspawar
Tue, 12/04/2012 - 16:02
Permalink
what is the flaw
this question is like a quiz .
in my view principally no mistake
But one flaw is there -- TCPI = EAC-EV/ETC = BAC-EV/EAC-AC = 102/354 = 0.29, AND variance is becoming more than +50% /-50% (rough order of estimate)
hence, here is budgting error. A
steelproject2012
Fri, 01/25/2013 - 10:17
Permalink
Hi sspawer, i think by using
Hi sspawer, i think by using AC=354, u are agreeing that the value given by the PM is correct. Pls take a llok at it because I don't think it is correct calculation.
501796652 (not verified)
Tue, 12/04/2012 - 16:53
Permalink
Option A
I think the Answer is A, In this situation every one is circulated with BAC ,EV and EAC and the PM it reporting a different ETC. This question is more towards Social and Etihical Reponsibilities rather than an EVM question.
As per PMIsm, This is not a Law or Ethics Breach, So we should inform the PM about the error as a first step.
sunitaPMP
Sat, 01/05/2013 - 09:23
Permalink
can anyone let me know what
can anyone let me know what is the correct answer of this question??
Thanks..
sspawar
Sat, 01/05/2013 - 13:08
Permalink
Dear AMBERfrom where you
Dear AMBER
From where have you got this question?
it is strange question.
though what I have told earlier - other than that what could be the explanation?
peeyushm
Fri, 01/25/2013 - 04:26
Permalink
Answer is A but my reasoning
Answer is A but my reasoning to reach it as following:
BAC = 100
EV =998
EAC=1099
EAC = BAC-EV+AC, so AC=997
Now ETC = EAC-AC = 1099 -997 = 102
White PM saying ETC =354 so its budgeting error.
This justificatio is ok?
sspawar
Fri, 01/25/2013 - 07:27
Permalink
EAC =1099AC= not givenETC =
EAC =1099
AC= not given
ETC = 354
EAC = ETC +AC
1099 = 354+AC
AC = 745.
It means
EV = 998, has been obtained by AC = 745.
So in this contest there is no error.
For EV remained = 1099-998 =101,
Its ETC is forecasted = 354
its TCPI = 101/345 = 0.28
ESTIMATE variation is = +150% in place of maximum range of +/- 50%. hence it is error. She can put ETC= 1.5*101 =152
thus EAC will be = 745+152= 897.
So ultimately there is error
AD
Fri, 05/10/2013 - 04:16
Permalink
From scordo
This is from Scordo. I made this wrong too and tried to get the analysis from this discussion. This is what I think:
Work remaining = 1100-998 = 102
Since EAC is less than BAC (1099<1100), CPI should be greater than 1 (project is performing more than planned). In this scenario the ETC should be less than the work remaining. However ETC in question is 345 > 102.
Not sure if we would think beyond the formula to answer correctly.
kkzyz
Fri, 05/10/2013 - 18:45
Permalink
Answer is 'A', why?- First
Answer is 'A', why?
- First don't asume that ETC is Ok, that's what we have to verify.
- Without too much math AC = EV = 998, why? because if your EV is 998, and the question doen's indicate that something exceptional has happened with the project cost, it means that you have already spend 998 to complete the current work (EV).
- Now if BAC = 1100, EAC = 1099 (difference of only $1) and AC = 998, ETC can not be 354
- ETC should be 102 or 101: BAC - AC = 102 or EAC - AC = 101.
That's why we can say that there is an error on what the PM has reported.
BTW, those answer that mention ESTIMATE variation range or ROM of +/- 50% this estimates are comons during initiating phase (also they are asumming that the ETC reported by the PM is Ok). If PM is reporting a budget forcast, the project should be in execution, when the variation in budget should be +/- 10, so