To make you easier to understand, I give you here an example:
In order to deliver a work package, they gave you a budget of 4000$ at first. After 1 week, you realized that you actually need 5000$ to complete that workpackage. And you have spent 2000$. You still need to pay the rest of 3000$.
5000$ is Estimate at Completion. 3000$ is Estimate to Complete.
The formula EAC = BAC/CPI is used if current variances are thought to be typical in the future.
if the current variances are thought to be atypical in the future and the original budget is more reliable, use the formula EAC = AC + BAC - EV
Example:
You are 3 months into a 9 month project. The project is progressing as planned and you expect no major problems in the foreseeable future. Your Budget at Cost is 500,000, Earn Value = 173,000, CPI = 1,05, AC = 164, 761. How much i the EAC?
There is certain keyword that you must look: "The project is progressing as planned and you expect no major problems in the foreseeable future." This indicates that there were no variances and that you can expect it to continue at the same rate. So in use the formula for EAC typical = BAC/CPI
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You are from vacation and you found out that your a project has the following numbers: EV=100,000, CPI=0.85, SPI=0,77, AC=117,000, PV=130,000, ETC=315,000, BAC=420,000. You discuss these numbers with your team and team lead promises that this was unusual, that issues have been resolved and thet the project will now return to normal again. What is your new EAC?
There is certain keyword that you must look: "Team lead promises that this was unusual, that issues have been resolved and thet the project will now return to normal again" This means that the variances are atypical and that we need use another formula: EAC atypical =AC+BAC-EV
cuongpt
Tue, 03/22/2011 - 07:01
Permalink
To make you easier to
To make you easier to understand, I give you here an example:
In order to deliver a work package, they gave you a budget of 4000$ at first. After 1 week, you realized that you actually need 5000$ to complete that workpackage. And you have spent 2000$. You still need to pay the rest of 3000$.
5000$ is Estimate at Completion. 3000$ is Estimate to Complete.
Awtas
Tue, 03/22/2011 - 13:26
Permalink
Thank you for your replay, I
Thank you for your replay, I understand the concept, but also CPI can be used.
let's take the example.
You budgeted 5k, after 1 week your EV = 1k, AC=2k.
Your ETC = 5k-1k = 4k, but also (CPI = 1/2 = .5) ETC = 4/.5 = 8k both are correct, which one should be used as the right answer?
Lana
Wed, 05/04/2011 - 13:10
Permalink
The formula EAC = BAC/CPI is
The formula EAC = BAC/CPI is used if current variances are thought to be typical in the future.
if the current variances are thought to be atypical in the future and the original budget is more reliable, use the formula EAC = AC + BAC - EV
Example:
You are 3 months into a 9 month project. The project is progressing as planned and you expect no major problems in the foreseeable future. Your Budget at Cost is 500,000, Earn Value = 173,000, CPI = 1,05, AC = 164, 761. How much i the EAC?
There is certain keyword that you must look: "The project is progressing as planned and you expect no major problems in the foreseeable future." This indicates that there were no variances and that you can expect it to continue at the same rate. So in use the formula for EAC typical = BAC/CPI
------
You are from vacation and you found out that your a project has the following numbers: EV=100,000, CPI=0.85, SPI=0,77, AC=117,000, PV=130,000, ETC=315,000, BAC=420,000. You discuss these numbers with your team and team lead promises that this was unusual, that issues have been resolved and thet the project will now return to normal again. What is your new EAC?
There is certain keyword that you must look: "Team lead promises that this was unusual, that issues have been resolved and thet the project will now return to normal again" This means that the variances are atypical and that we need use another formula: EAC atypical =AC+BAC-EV
Hope it helps you understand the difference.