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EAC Calculation using CPI

2 replies [Last post]
Wed, 2015-12-09 16:35
Jeff Smith
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I'm using the formula for EAC:

EAC=AC+ ((BAC-EV)/CPI)

 

My question is, do I calculate my EAC for each activity and sum it up to the WBS or project level, or do I use the calculated CPI at the project level and calculate it there.


 

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Replies

Sat, 2016-01-09 01:42
#1
Patrick Weaver
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Hi Jeff,

To actually answer the question you asked....

The EAC calculation is based on the overall CPI, not the individual work package CPIs (for the simple reason the CPI on un-started work packages = 1 for the work package). The basic concept is that the best indicator for the performance of future work is the performance on work completed and all incomplete work needs to be scaled by the CPI.

The more correct term for EAC is 'Independent Estimate At Completion' - there are a range of formula in the standard, yours, the one proposed by Rafael and several others.  the rules for IEAC is the means of calculation are determined first and then used consitently - you don't formula shop to get the best outcome. See: http://www.mosaicprojects.com.au/WhitePapers/WP1081_Earned_Value.pdf

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Thu, 2015-12-10 12:59
#2
Rafael Davila
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I am not a fan of EVM nor of ES

http://www.earnedschedule.com/Docs/Forecasting%20Project%20Schedule%20Co...

  • The use of “earned duration” and “earned schedule” metrics is NOT areplacement for scheduling tools such as PERT, CPM, Monte Carlo scheduling.
  • SPI & SV indicators are flawed and exhibit strange behaviour over the final third of the project, and are as a consequence not reliable.
  • The use of the “Earned Schedule ” method provides indicators SPI(t) & SV(t), which behave correctly during the project life.

http://www.pmknowledgecenter.com/node/163

But maybe the correct formula is:

EAC=AC+ ((BAC-EV)/(CPI*SPI))

http://edward-designer.com/web/pmp-calculation-formulae/

Different software might use different formulas so check with your software literature.

About - I calculate my EAC for each activity and sum it up to the WBS or project level, or do I use the calculated CPI at the project level and calculate it there?

I would expect both to yield the same value no matter what method your software uses. Your CPM software shall show EAC & CPI at all WBS levels down to activity level for any cost loaded schedule at a few mouse clicks.

Good Luck

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