EAC = AC + BAC -EV

Submitted by nobel on Tue, 08/28/2012 - 23:33

 

Sorry guyz i am kind of new to this. Can any one help me out solving the below problem and also let me know how did people arrive at this formula, and what formulat to use. I understand  we need to use

EAC = AC + BAC -EV ?

But, Guyz how is this possible. How did we arrive at this formula?

 

EAC  = BAC / CPI,

CPI = EV / AC

substituting we get.

EAC  = (BAC * AC)/  EV

 

I am trying to solve this question posted  in one of the earlier topics

Question 4 : You are a project manager working for Mail House King. Your company processes orders for several mail-order catalog companies. Your project is to install new mail-sorting equipment and software. You’ve had some problems and experienced some variances so far during the project. You do not expect these variances to continue throughout the life of the project. Your project sponsor has asked for an EAC. You know the following information: PV = 650, BAC = 750, EV = 675, AC = 650. Which of the following is the correct EAC given the circumstances?

 

A 725

B 723

C 75

D 78

 

if i use

 

EAC  = (BAC * AC)/  EV i get               723

EAC = AC + BAC -EV gives                          725

 

 

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aliweb

Wed, 08/29/2012 - 03:52

This formula EAC = (BAC * AC) / EV which you derived from EAC = BAC / CPI is to be used when variances will CONTINUE or when variances ar TYPICAL.

The formula EAC = AC + (BAC - EV) is to be used when variances WON'T CONTINUE or when variances are ATYPICAL.

The question clearly says that variances won't continue hence you will use EAC = AC + (BAC - EV)

nobel

Wed, 08/29/2012 - 18:29

Thanks a lot sir. That was really helpful. I will make a note of it.