Estimate At Completion forecast (EAC) A project has been estimated to take eight

Question

Estimate At Completion forecast (EAC)

A project has been estimated to take eight weeks and cost $65,000. The critical path is A - D. Cost and earned value data are provided below:
EV PV AC
Budget BCWP - BCWS SV SPI - ACWP CV CPI
A $8,500 $8,500 $8,500 $ - 1.00 $7,000 $1,500 1.21
B $15,000 $15,000 $15,000 $ - 1.00 $13,000 $2,000 1.15
C $6,800 $2,530 $2,700 ($170) 0.94 $4,000 ($1,470) 0.63
D $18,000 $900 $3,000 ($2,100) 0.30 $1,200 ($300) 0.75
E $16,000 $0 $0 $ - $0 $ -
Project: $65,000 26,930 29,200 ($2,270) 0.92 $25,200 $ 730 1.07

(i) Calculate the Estimate At Completion (EAC) considering future performance will be back on schedule and budget.
(ii) Calculate EAC considering that the project will continue to perform as it has to date.
(iii) Using either of these two numbers discuss the status of the project and if the project manager needs to take corrective actions. Justify your comments.

Explanation / Answer

Estimate At Completion forecast (EAC)

A project has been estimated to take eight weeks and cost $65,000. The critical path is A - D. Cost and earned value data are provided below:
EV PV AC
Budget BCWP - BCWS SV SPI - ACWP CV CPI
A $8,500 $8,500 $8,500 $ - 1.00 $7,000 $1,500 1.21
B $15,000 $15,000 $15,000 $ - 1.00 $13,000 $2,000 1.15
C $6,800 $2,530 $2,700 ($170) 0.94 $4,000 ($1,470) 0.63
D $18,000 $900 $3,000 ($2,100) 0.30 $1,200 ($300) 0.75
E $16,000 $0 $0 $ - $0 $ -
Project: $65,000 26,930 29,200 ($2,270) 0.92 $25,200 $ 730 1.07

(i) Calculate the Estimate At Completion (EAC) considering future performance will be back on schedule and budget.

EAC=

EAC ==BAC/CPIc

=$25,700.00

(ii) Calculate EAC considering that the project will continue to perform as it has to date.

EAC=BAC/CPIc

EAC = $61,300.00

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