Sample Paper Q7 – Earned Value – EAC Calculation; SPI Or Not

3rd May 2013

Hi,

Sorry if this question has been discussed before. The main question i wanted to ask was around the Estimated Cost at Completion, and which formula to use (with SPI or without).

The question gives a graph with planned costs around 30% higher than earned value. Part of the questions asks to calculate SV or SPI. From these two pieces of information i decided to use the formula that includes SPI. Was this correct? When should i use the two different equations?

Could i also clarify that the correct formula for estimated final duration is PD/SPI?

I would appreciate any feedback,

Thanks, Nathan.

Paul Naybour

Paul Naybour is a seasoned project management consultant with over 15 years of experience in the industry. As the co-founder and managing director of Parallel, Paul has been instrumental in shaping the company's vision and delivering exceptional project management training and consultancy services. With a robust background in power generation and extensive senior-level experience, Paul specializes in the development and implementation of change programs, risk management, earned value management, and bespoke project management training.

3 thoughts on “Sample Paper Q7 – Earned Value – EAC Calculation; SPI Or Not”

Paul
21st April 2020 at 11:50 pm

Nathan

For the real Earned Value Geeks there are several ways of calculating EA, called Ieac1, IEAC2, IEAC3, IEAC4, look at the PMI Body of Knowlege if you really want.

The good news is that for the APMP, as paul says you only need EAC=BAC/CPI. Well done Paul

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Paul
21st April 2020 at 11:50 pm

Hi Nathan,
Sorry – I’ve never seen those 2 ways of calculating EAC. The Parallel book uses :
EAC = BAC / CPI
ETC = OD / SPI
Which is basically the budget x current efficiency.
Maybe Paul N could clarify.
Regards
Paul

Reply
Student
21st April 2020 at 11:50 pm

Hi Paul,

Thanks for the reply. I’ve had a look at your answer and i got the same answers apart from the EAC part.
I should clarify my previous question; when to use which of the following two formulas for EAC;

1. EAC = AC + [(BAC – EV) / CPI]

2. EAC = AC + [(BAC – EV) / (CPI X SPI)]

I used formula 2.

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