If BAC = $1M, SPI = .90 and CPI = .80, CR = (.90 X .80) = .72.
Thus, Cost EAC = $1M / .72 = $1,388,889
This formula takes into account that, if you are both over budget and behind schedule, you'll be overspending (indirect costs, LOEs etc.) for longer than planned. There is much empirical data to show that this is the most accurate EV predictor of Cost EAC.
Fraternally in project management,
Steve the Bajan
Member for
21 years 7 months
Member for21 years8 months
Submitted by Rafael Davila on Thu, 2011-11-10 11:21
Member for
20 years 7 monthsTom,You might want to
Tom,
You might want to add:
Critical ratio EAC (SPI X CPI)
Cost EAC = BAC / (SPI X CPI)
If BAC = $1M, SPI = .90 and CPI = .80, CR = (.90 X .80) = .72.
Thus, Cost EAC = $1M / .72 = $1,388,889
This formula takes into account that, if you are both over budget and behind schedule, you'll be overspending (indirect costs, LOEs etc.) for longer than planned. There is much empirical data to show that this is the most accurate EV predictor of Cost EAC.
Fraternally in project management,
Steve the Bajan
Member for
21 years 7 monthsBeware, SPI can be
Beware, SPI can be flawed!
http://www.earnedschedule.com/Docs/Earned%20Schedule%20-%20A%20Breakthrough%20Extension%20to%20EVM.pdf