Calculating VAC

Submitted by MuhammadKhan74 on Mon, 08/13/2012 - 02:44

If some one could explian the following question please:

 

You are project manager responsible for constructing a new sports
arena for the upcoming Olympics. Construction began on a project
over a year ago. The stakeholders of the project want a status report
on the performance of the project to date. You’ve obtained the
following measurements:
BAC=500, ETC=200, PV=500, AC=200, EV=300, CPI=1.5
You believe the type of variances that have occurred on the project to
date are typical, and do not expect these variances to continue. What
is the VAC for the project?
A. 100
B. 400
C. 300
D. 200
E. 333.33
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aliweb

Mon, 08/13/2012 - 04:06

Answer is A.

Formula to calculate VAC is:

VAC = BAC - EAC

We need to calculate EAC first because its value is not given.

As it says "the type of variances that have occurred on the project to date are typical, and do not expect these variances to continue" hence we will use the following formula to calculate EAC:

EAC = AC + (BAC - EV)

If they have said that they expect these variance to continue then we would have used following formula:

EAC = BAC / Cumulative CPI

So now calculating EAC.

EAC = 200 + (500 - 300)

EAC = 400

Now calculating VAC.

VAC = 500 - 400

VAC = 100

MuhammadKhan74

Mon, 08/13/2012 - 07:22

Thanks a lot.

 

Dear Admin,

 

Kindly correct the following formula available under math/formula tab uner pmp material:

9. Est. At Completion (EAC)

BAC / CPI,

AC + ETC -- Initial Estimates are flawed

AC + BAC - EV -- Future variance are Atypical

AC + (BAC - EV) / CPI -- Future Variance would be typical

I applied the wrong formula and got wrong answer.

 

Regards,

MK