Pls help with this EAC calculation

Submitted by sunitaPMP on Sat, 01/19/2013 - 22:31

 

Pls help with this question from christ. scordo

 

Q:Your Vice President has asked you what the Estimate at Completion is going to be for an extremely small project you are working on. You were given a budget of $30, and to date you have spent $20 but only completed $10 worth of work.

  1. 60

  2. Not enough information to estimate.

  3. 30

  4. 15

Answer given is  a) 60- formula used=BAC/CPI

My answer was 40.I was using EAC formula= AC+(BAC-EV)=20+20=40

Pls explain why this is wrong...

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th9063

Sun, 01/20/2013 - 00:21

 Here is my take on the question

Budget= $30 (BAC)

to date spent $20 ((AC)

Only completed worth of work (EV)$10

EAC=BAC/CPI

CPI=EV/AC

CPI=10/20

CPI=.5

EAC=30/.5

EAC=60

sunitaPMP

Sun, 01/20/2013 - 00:46

Yes,this is the corerct answer.But my question is why we can not use the formula AC+(BAC-EV)=20+20=40(this is not in answer set though)

sspawar

Sun, 01/20/2013 - 10:20

you know , it depends on trend of future expenditure,  typical or atypical .


since it is extremely small project, hence you can consider that it is a typical (NOT an atypical) through out its life cycle  (start to end) .


hence A is correct answer.

sunitaPMP

Sun, 01/20/2013 - 17:53

So how to know the scenario is typical or atypical?

halle

Sun, 01/20/2013 - 20:20

Typical when there are no extraordinary circumstances or one-time event delaying the project.  BAC/CPI for typical and AC+(BAC-EV) for atypical. 

Actually, you don't even need a formula to get $60, it's simple logic:  if it's taking $20 to earn each $10 value in the budget, then each $10 equate to $20.  Thus, the estimate at completion for be $20 X 3 = $60.

This is a very straightforward question.  In the real exam, there will be questions where you will have to solve for either BAC or EAC first or both where one or two of the variables are missing [derived by algebraic extrapolation or plain logic] to be able to answer the question.