Question 108 from Oliver Lehmann 175Qs

108. Your project exceeded costs in the past caused by an underestimation of resource costs in the cost baseline: PV: $1,200,000, EV: $1,000,000, AC: $1,200,000 You expect the underestimation to influence the future as much as it did in the past. If the value of the remaining work (BAC – EV) is at $1,000,000, what should be your new EAC (estimate at completion)?


o $1,800,000
o $2,000,000
o $2,200,000
o $2,400,000


Answer says to use "EAC forecast for ETC work considering both SPI and CPI factors", i.e. AC + [(BAC-EV)/CPI*SPI]. Why? The question's scenario seems not to meet the application condiction of the formula. I think the other formula is more suitable: AC + [(BAD-EV)/CPI]. Do you thinks so?

EAC = AC + ETC

CPI at current point  = EV/AC = 1000000/1200000

Trend will be same in future

ETC  = Remaining work  (BAC- EV) / CPI = 1000000/1000000/1200000 = 1200000

EAC = AC+ETC = 1200000+1200000 = 2400000, ans would be D

 

When Planned deadline is a constraint or condition to complete project, and in any point of time , project is running ahead or behind with any SPI, along with any CPI, then in that case, you apply this formula for EAC :

EAC = AC + [(BAC-EV)/(SPI*CPI)]

But in question it not asked to complete at scheduled date.

hence formula will be applied only with CPI.

Regards

yes, it didn't mention schedule factor. That's why I'm confused by the explanation of it. Thanks anyway.