# forecasting costs (etc, eac, vac) in project management

Post on 15-Apr-2017

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Forecasting

SV= -\$507CV= -\$933\$3000SPI = 0.80\$2574\$2,067CPI = 0.69BAC (Project Total PV) = \$4,134\$4,134

Estimated cost to complete remaining work

Estimated Costs to Complete Remaining Work (ETC)ETC =BAC-EVEV / AC

Estimated Costs to Complete Remaining Work (ETC)ETC =BAC-EVCPI

SV= -\$507CV= -\$933\$3000SPI = 0.80\$2574\$2,067CPI = 0.69BAC (Project Total PV) = \$4,1340.69

Estimated cost to complete remaining work

Estimated Costs to Complete Remaining Work (ETC)\$2,067-\$4,134ETC =0.69

Estimated cost to complete remaining work

Estimated Costs to Complete Remaining Work (ETC)ETC =\$2,996

Estimated cost to complete remaining work

Estimate At Completion (EAC)EAC =AC +ETC

Methods Used to Revise Estimates of Future Project Costs:EACreAllows experts in the field to change original baseline durations and costs because new information tells them the original estimates are not accurateEACfUses actual costs-to-date plus an efficiency index to project final costs in large projects where the original budget is unreliable

EAC =\$2,996(ETC)\$3,000(AC)

\$5,996(EAC)Estimate At Completion (EAC)+

Estimated cost to complete remaining work

Estimated cost to complete remaining work

If CPI doesnt change, AC at end of project (EAC) is \$5,996

EV, BAC, and PV will all be equal at end of project (\$4134)

Estimated cost to complete remaining work

If CPI doesnt change, AC at end of project (EAC) is \$5,996

EV, BAC, and PV will all be equal at end of project (\$4134)

VAC

Estimated cost to complete remaining work

Variance At Completion (VAC)VAC =BAC-EAC\$5,996(EAC)\$4,134(BAC)

--\$1,862(VAC)

VAC indicates expected actual over-or underrun cost at completion.VACCost variance at completion (BAC-EACre), where EACre is derived by estimators in the field.Or, alternatively, cost variance at completion (BAC-EACf), where EACf is derived from a formula using actual and earned value costs.VAC indicates expected actual over-or underrun cost at completion.

Get Back on Track

To Complete Performance Index (TCPI)TCPI=BAC-EVBAC-AC\$2,067-\$4,134

\$3,000-\$4,134=\$2,067\$1,134

=1.88

TCPI = the amount of value each remaining dollar in the budget must earn to stay within budget, or what does our CPI need to be to get back on track

TCPI

CPI0.69

TCPI

1.88

?

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