How to deal with EAC calculation
The EAC formula have 4 types.
Per Rita's book,
1. EAC = AC + Bottom up ETC -- Used when original estimate is fundamentally flawed
2. EAC = BAC / Cumulative CPI - Used if no variances have occured and same rate of spending will continue
3. EAC = AC + (BAC- EV) - Used when variances are atypical /irregular
4. EAC = AC + ( BAC-EV / Cumulative CPI * Cumulative SPI) - Used when variances are typical(regular). Assumes poor cost performance. Hope this helps.
Q1. Since ETC is not able to calculate declare by PMBOK, So can i say, if the question provided ETC values, i must be use the (1) formula?
Q2.And also if the question provided SPI and CPI, i use (4) ?
Q3. To understand the formula, can i say, in both of (3) and (4),
(BAC- EV)=ETC;
( BAC-EV / Cumulative CPI * Cumulative SPI) = ETC, too.
Thanks you for answer.
abhinavpraneet
Fri, 02/28/2014 - 19:11
Permalink
Read the question carefully!
The choice of which formula to use will depend entirely on the situation described in the question. Please do not assume that if the question provides or if you are able to interpret certain values like ETC or SPI/CPI that the corresponding formula has to be used. PMP questions do provide fluff/distracting information to confuse you.
As mentioned in PMBOK 5th edition (or Rita 8th edition or any other book), the scenario has to be understood to apply the formula. If the variances are atypical and random, which are corrected and not expected to occur, you can go with the the 3rd option you have listed above. If the nature of variances is constant and expected to continue for rest of the project, then option 2.
I (atleast in my preparation) have never come across a question on EAC that requires option 4 listed above. I have probably seen only one question using option 1 in your list.
So in short: comprehend and fully understand what the situation is, then apply formula and ignore all additional information.
Abhinav Praneet, PMP