EAC: Which formula to use

Discussion in 'PMP' started by Deepti Bhattacharya, Sep 14, 2020.

  1. Deepti Bhattacharya

    Deepti Bhattacharya Active Member

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    Which formula of EAC to use here? Answer says one with CPI and SPI both, but how did they arrive at the conclusion
     
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  2. MAHESH TANAJI SANKPAL

    MAHESH TANAJI SANKPAL Active Member

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    My views - To be confirmed by Simplilearn SME:

    Given (I have ignored the thousands 000):
    EV = 1000
    PV = 1200
    AC = 1200

    BAC - EV = 1000
    BAC - 1000 = 1000
    BAC = 2000

    SPI = 10 /12 => Behind Schedule
    CPI = 10 /12 => Over Budget

    Since we are given that the CPI trend will remain the same in the future as well:
    EAC = BAC / CPI
    = 2000 / (10/12)
    = 2400

    If we were given that both CPI and SPI will affect the future costs then the formula will be:
    EAC = AC + [(BAC - EV) / (SPI * CPI)]
    = 1000 + [ 1000 / (10/12 * 10/12)
    = 1000 + 1440
    = 2440

    Note the fact that SPI will also impact the cost is not explicitly stated in the problem and so we should not use the above formula.
    Moreover the answer also does not match with any of the options.

    Please refer to PMBOK page 267 for all the formulas for EAC.
     
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  3. tim jerome

    tim jerome Well-Known Member
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    You're using historic project performance as your assumption (BAC/CPI) instead of assuming CPI = 1 (originally planned performance) to govern the forecast (AC+(BAC-EV)). The question does not consider SPI - that is a good call.

    Follow the footprints of this logic to trap the correct answer.
     
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    gautam_kaistha likes this.

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