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Forecasting costs (etc, eac, vac) in Project Management

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How to calculate and interpret ETC, EAC, VAC, and TCPI as it is used in earned value analysis in project management. From Project Management Fundamentals, a new type of textbook designed to be: granular, easy to use with a "flipped" classroom approach, and designed for electronic distribution on iPads, kindle readers, and PCs/Mac. Find out more at http://pmf.education/

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Forecasting costs (etc, eac, vac) in Project Management

  1. 1. Forecasting
  2. 2. $0.00 $1,250.00 $2,500.00 $3,750.00 $5,000.00 0 Week 1 Week 2 Week 3 PV AC EV SV= -$507CV= -$933 $3000 SPI = 0.80 $2574 $2,067 CPI = 0.69 BAC (Project Total PV) = $4,134$4,134
  3. 3. Estimated Costs to Complete Remaining Work (ETC) ETC = BAC-EV EV / AC
  4. 4. Estimated Costs to Complete Remaining Work (ETC) ETC = BAC-EV CPI
  5. 5. $0.00 $1,250.00 $2,500.00 $3,750.00 $5,000.00 0 Week 1 Week 2 Week 3 PV AC EV SV= -$507CV= -$933 $3000 SPI = 0.80 $2574 $2,067 CPI = 0.69 BAC (Project Total PV) = $4,134 0.69
  6. 6. Estimated Costs to Complete Remaining Work (ETC) $2,067-$4,134 ETC = 0.69
  7. 7. Estimated Costs to Complete Remaining Work (ETC) ETC = $2,996
  8. 8. Estimate At Completion (EAC) EAC =AC +ETC
  9. 9. EAC = $2,996(ETC) $3,000(AC) $5,996(EAC) Estimate At Completion (EAC) +
  10. 10. $0.00 $1,500.00 $3,000.00 $4,500.00 $6,000.00 0 Week 1 Week 2 Week 3 PV AC EV
  11. 11. $0.00 $1,500.00 $3,000.00 $4,500.00 $6,000.00 0 Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 PV AC EV If CPI doesn’t change, AC at end of project (EAC) is $5,996 EV, BAC, and PV will all be equal at end of project ($4134)
  12. 12. $0.00 $1,500.00 $3,000.00 $4,500.00 $6,000.00 0 Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 PV AC EV If CPI doesn’t change, AC at end of project (EAC) is $5,996 EV, BAC, and PV will all be equal at end of project ($4134) VAC
  13. 13. Variance At Completion (VAC) VAC = BAC-EAC $5,996 (EAC) $4,134 (BAC) - -$1,862(VAC)
  14. 14. Get Back on Track
  15. 15. To Complete Performance Index (TCPI) TCPI=BAC-EV BAC-AC $2,067-$4,134 $3,000-$4,134 = $2,067 $1,134 = 1.88
  16. 16. TCPI 0 0.5 1 1.5 2 2.5 CPI 0.69 TCPI 1.88 ?

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