TOPIC: PM study coach - TCPI demystified

Hi Cornelius,

I have a question on the TCPI demystified paper from the PMstudy coach cost mgmt. lesson. On page 3 there is a calculation of the required EAC to be able to calculate the TCPI (based on EAC). Here are the numbers from Frank's dog house:

status on day 3:

BAC=500 USD
EV=300 USD
AC=400 USD

To calculate TCPI, we first need to calculate EAC. Per definition the EAC=AC+ETC (one possibility). So, corresponding to this example we have to make a new forecast on ETC as we need to earn 2 USD value for every 1 USD we spend (as posted in the example). Therefore new ETC = 400 USD ( 200 USD / day).

Now, in the calculation of the EAC there is the EV used instead of AC - so, can you tell me please what is the reason for this? I thought we need AC to calculate the EAC?

I look forward to your reply.

thanks, Gerald

TCPI demontrated overall performance and is calculated by dividing the Total work remaining by Total fund remaining. In this case,
the total work remaining will be BAC-EV and
Total fund remaining will be BAC-AC
thus, the formula is TCPI = (BAC-EV)/(BAC-AC)

Thx for feedback first of all.

I agree to your formula in principle, but when you look at the example following to your posted formula, it is necessary also to calculate the TCPI based on EAC:

TCPI = (BAC-EV) / (EAC-AC)

To be able to calculate this formula now, it is necessary to calculate actual EAC first. Therefore 2 possible way would work:

1) EAC = AC + BAC - EV
= 400 + 500 - 300
= 600

2) EAC = AC + ETC
= 400 + 400
= 800

In this example you have 400 USD, 200 USD per day, 2 days left. So, described on the paper it is calculated as following:

EAC = 700 -> (EV + 400) , EV = 300 (3 days are already over, 100 USD per day)

As you can see here, in the example ones is using EAC = EV + ETC instead of EAC = AC + ETC

Do you know why this has been chosen?

thx, gerald

I almost forgot on my entry here sorry for that - comming back to it, maybe does anyone know the answer on it? Or can anyone correct me? (if my thoughts are wrong)

would be really appreciated...

thx,gerald