Question related to EAC

Submitted by hemald on Wed, 08/19/2015 - 12:17

Hello 

Please help me by explaining why Ans 4 is correct.

As a project manager you realize that the initial budget cost, Budget at Completion (BAC) for your project is no longer viable. You need to develop a new Estimate At Completion (EAC) forecast assuming current variances would continue in the future. Which of the following formula should you use for calculating EAC? Here AC is the Actual Cost , EV is the Earned Value, PV is the Planned Value .

  • 1) EAC = AC + ETC
  • 2) EAC= AC+ (BAC - EV)
  • 3) EAC = EV/PV
  • 4) EAC = BAC/ cumulative CPI

 

Ans: 4

 

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gomsy's picture

gomsy

Thu, 08/20/2015 - 18:38

The answer is correct as there are no variances. Hence, EAC = BAC/ cumulative CPI

afaqazi

Fri, 08/21/2015 - 09:52

In examination there many be many relevant and irrelevant knowledge that can confuse you. But you must pick up the most revelent point from the question. Here in the question, it clearly emphasis on the "assuming current variances would continue in the future". Which means, you must continue with the same variance and find out what is your EAC. Hence answer is option#4

 

 

 

hemald

Sun, 08/23/2015 - 04:21

Thanks all for clarifying this.

NISHA

Fri, 08/28/2015 - 05:10

There will be three situations to calculate EAC

EAC=AC+(BAC-EV)(Atypical-When the varience was only once due to some reason and now you are                                   going to move forward as planned)

EAC=AC+ETC(Manual)(When you knkw that whatever you have planned is flawed and you need to                                           estimate now..so it will be Actual cost + Bottom up estimating)

EAC=BAC/CPI(Typical-When you know that whatever is the rate of moving forward the same will move forward for the rest of the project)

Check below link for more information.

https://www.youtube.com/watch?v=tSH77PGFR2I

Thanks and regards

Nisha Rai,PMP