4 ways to calculate EAC - Clarification

Submitted by strua on Fri, 01/10/2014 - 02:12

I am reading through the cost knowledge area of Rita 8th edition, but I am having a tough time understanding how to select the correct formula out of the 4 different ones.

The following are the formulas  of EAC: 

AC+Bottom up FTC

BAC/CPI

AC+(BAC-EV)

AC+ ((BAC_EV)/(CPIxSPI))

I have no problem in implementing them, but depending on the scenario (question) i am not sure which one will be used when...

Would someone be able to elaborate on this matter?  

Thanks guys!

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awibergh

Fri, 01/10/2014 - 12:20

Hi strua, I hade the same question as you a couple of weeks ago. Found an excellent explanation by Harvinder in this blogpost. Read it and things will become clearer to what formula to use in different scenarios.

http://www.deepfriedbrainproject.com/2009/09/estimate-at-completion-eac-...

My own comment is that you should only use the ones that includes CPI and/or SPI if the question indicates that you except the same trend for the rest of your remaining project time regarding CPI and SPI. If you expect deviations ahead you should use one of the other formulas. The question should give you guidance about this if you read it carefully. Please be aware of that your first formula is incorrect. It should say AC + bottom up ETC not FTC. But I guess that was maybe just a typo from you.

Good Luck!

PMESN

Sat, 01/11/2014 - 11:33

Hi Stura,
You can see the details of EAC formula and entire set of other Cost related formulas here -http://www.pmexamsmartnotes.com/control-costs-process/
Feel free to explore more notes on this blog, and a leave a note if you need any clarifications.

Best,
Shiv

strua

Sat, 01/11/2014 - 20:55

Awibergh & Shiv, thank you for your comments. The material suggested is quite helpful!

Cheers

 

awibergh

Sun, 01/12/2014 - 19:47

 No problem :-)