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Which EAC formula to use as Ques doesn't give any hint-To Tim Jerome

_56468

Well-Known Member
You were given a budget of $3000 and you spent $2000. However, you only completed $1200 worth of work. What do you currently expect the TOTAL project to cost considering your situation?
SELECT THE CORRECT ANSWER

Not possible to estimate
5000
6000
6200
Correct Option:B

EXPLANATION

Estimate at completion (EAC) =BAC/CPI. Here, we have BAC=$3,000, AC=$2,000, and EV=$1,200. CPI=EV/AC=1200/2000=.6. So, EAC=3000/.6 =5,000.
 

tim jerome

Well-Known Member
Trainer
BAC = 3000
AC = 2000
EV = 1200

EAC = BAC/CPI
CPI = EV/AC
= 1200/2000
= .6
EAC = 3000/.6
= 5,000

EAC = AC+(BAC-EV)
= 2000+(3000-1200)
= 2800

The option that you CAN select is provided by BAC/CPI.

Normally, the assumptions will tell you -

'Assume Current CPI for future work' will tell you to use BAC/CPI.
'Assume planned rate' will tell you to use AC+(BAC-EV). Traditionally,
these two formulas will be the ones you apply on the exam.
 

_56468

Well-Known Member
For questions like this, where it is not mentioned whether we should consider current CPI or planned BAC, we should calculate using both and look for correct option from the choices, is it?
 

Arvind Shekhar

Well-Known Member
Pl try to simplify the process , read the statement well. If you are not using English as native language some times you feel lost in lack of grammar. I am from India and we use English differently more as language with right grammar. Here simplify the statement leave grammar.
What do you currently expect the TOTAL project to cost considering your situation?
"expect current situation is to remain" points to fact that CPI is not going to change it will be same for remainder of period.
Choose BAC/CPI page 267 EAC formula 1st condition. sometimes they use word "TYPICAL"
Means what is happening in project is not going to change.
ii If what has happened in project so far is an exception and you hope the rest of project will follow what is planned it is situation described as "Atypical". means what happened is happened rest as per planned rate.
in that case actual cost AC till date + Remaining work at planned rate.
ie AC + (BAC-EV) .This (BAC-EV ) is cost of outstanding work also used in both TCPI formula as numerator.

If you still not find it handy than calculate using both forms.
I have used Books written by Aileen Ellis "How to get every Earned Value question right on the PMP® Exam: 50+ PMP®" and 50 numerical questions from Whizlabs Good resources.

Arvind
 

Alokesh Podder

New Member
BAC = 3000
AC = 2000
EV = 1200

EAC = BAC/CPI
CPI = EV/AC
= 1200/2000
= .6
EAC = 3000/.6
= 5,000

EAC = AC+(BAC-EV)
= 2000+(3000-1200)
= 2800

The option that you CAN select is provided by BAC/CPI.

Normally, the assumptions will tell you -

'Assume Current CPI for future work' will tell you to use BAC/CPI.
'Assume planned rate' will tell you to use AC+(BAC-EV). Traditionally,
these two formulas will be the ones you apply on the exam.
outcome of 2nd formula here should be 3800, not 2800, think it's a typo
 

tim jerome

Well-Known Member
Trainer
What is the money we actually spent? It's 2000, right? Let's put that down.
What is the money we expect to spend? That's my baseline minus the value of completed work (or value of remaining work). That's 3000 minus 1200, or 800.

Therefore we have actual spend to date (2000) + value of remaining work (800).

Do you see it differently?
Thanks,
 
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