EAC formula - need explanation

Submitted by y0zh on Mon, 05/13/2013 - 14:45

There are two EAC formulae, each of them by its definition presents different purpose. Since ETC=BAC-EV, for me it's not clear why we distinct fundamentally flawed and atypical EAC forumlas?

For me, it looks like e.g. 2+3=5 and 2+2+1=5

Can you please throw some light on this please?

 

EAC ‘fundamentally flawed’ = AC + ETC

EAC ‘atypical’ = AC + (BAC – EV)

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Hemant Tandon

Tue, 05/14/2013 - 00:57

There is a flaw in your assumption...You seems to be assuming that the end value/results of both the formulas are same e.g. 5, whereas, thats not true.

Fundamentally Flawed: You need to use this formula when you think your estimation is totally flawed...You have already spent some money, which is AC...Now for rest of the work, it would best to re-estimate and comeup with fresh estimates instead of continuing with the old estimates.

Atypical:  In this scenario, you have noticed some cost variances....These cost variances could have occurred because of any reason e.g. unforseen delays etc...So, extra cost has incurred in past, however, you don't foresee any reason for incurring extra cost in future. So, the formula for calculating EAC is different in this scenario.

Regards,

Hemant, PMP

 

 

y0zh

Tue, 05/14/2013 - 06:09

for fundamentally flawed we don't consider BAC, since it is not accurate. Am I correct?


for Atypical we still believe that BAC valid and use it for calculation. Am I correct?