Senior — Principal
What types of EAC formulas exist?
sobes.tech AI
Answer from AI
In project management, using the EVM (Earned Value Management) methodology, different formulas are applied to estimate the cost at completion (EAC) depending on the situation:
-
EAC assuming current performance continues:
EAC = BAC / CPIwhere:
- BAC (Budget at Completion) — the project budget
- CPI (Cost Performance Index) — the cost performance index
-
EAC considering current costs and planned costs for remaining work:
EAC = AC + (BAC - EV)where:
- AC (Actual Cost) — actual costs
- EV (Earned Value) — the earned value
-
EAC considering both costs and schedule:
EAC = AC + [(BAC - EV) / (CPI * SPI)]where:
- SPI (Schedule Performance Index) — the schedule performance index
-
EAC assuming future work will be performed at planned performance:
EAC = AC + (BAC - EV) / CPI
The choice of formula depends on the analysis of the current situation and assumptions about the future performance of the project.