TOPIC: Need Clarification on Earned Value Calculations

Hi Friends,

Need your help on this one.....I am unable to understand the exact formulae to calculate Estimate At Completion (EAC). I see different formulae.

It would be vastly useful if someone can throw more light on which formulae to use & under which circumstances? The PMBOK is not helpful either.

Thanks in advance,
Chaps

Chaps,

We explain all the formulas in our separate "PMP Exam Formula Guide".

You can find it here:
www.project-management-formulas.com/index.php

(Brand new website - will be launched in the coming days. So you are the first to see it.)

Hi Cornelius,

I will surely check it out.

But actually I wanted some help now since I am preparing for the exams. Maybe I will look around. Thanks for your quick response.

Regards,
Chaps

Hi,

This is my understanding -

In a situation where we face some problems in the project, and the problems are 'one time only' situations. For example, someone comes down with malaria. Its a situation that is a rare probability that it will repeat again. Then we can say that the original plan was correct. We determine the estimate to completion, assuming that things will proceed as originally planned from today onwards -

EAC = AC + (BAC-EV)

In a situation where we face some problems in the project, and we figure out that it is something that would happen consistently through the project. For example, we thought someone would be able to write 400 lines of code in a day, but can actually write only 350 lines of code in a day. In this case we can expect the rest of the project to proceed at the same 'rate' as it is doing presently.

EAC = AC + (BAC-EV)/CPI -> I remember this by thinking that we need to bring in the current cost performance index, because this is the actual cost performance index for the project.

In a situation where we face some problems in the project, and we figure out that both the CPI and the SPI that we assumed during original estimation were incorrect.

EAC = AC + (BAC-EV)/(CPI * SPI) -> Same logic as the one above.

Please dont go by my examples. They are just things I have made up and could not be completely accurate. Also, you can do some more reading with these concepts in mind. They will help you understand.

Regards,
Anjali

Anjali,

Firstly, thanks for taking the time to look into and respond to my query. Appreciate your help.


Thanks,
Chaps