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To forecast the cost of a project, you need to calculate the Estimate at Completion (EAC). Read this comprehensive guide to all 4 methods of the EAC calculation!
EAC = Estimate at Completion Topics that Program Managers and EVM Personnel should understand from these EVMS equations include: ANSI/EIA 748 Earned Value Management Standard
Luckily, there are formulas that eliminate the guesswork. One of these formulas solves for Estimate at Completion — an important metric for monitoring a project budget. Keep reading to learn why to always calculate Estimate at Completion and exactly what this formula can do.
The earned value EAC formula is based on the simple concept that the estimate at completion is equal to the amount of money already spent on the contract plus the amount of money it will take to complete the contract.
Understand Estimate At Completion (EAC) Formulas & calculation using an example. Also find difference between EAC & ETC for PMP exam.
According to the PMBOK Guide, estimate at completion (EAC) is “the expected total cost of completing all work expressed as the sum of the actual cost to date and the estimate to complete.” Put simply, it predicts the total cost of a project once it’s finished.
Estimate at Completion (EAC) Formulas. The earned value EAC formula is based on the simple concept that the estimate at completion is equal to the amount of money already spent on the contract plus the amount of money it will take to complete the contract.
Formula: SPI = EV/PV. Output: A single number or fraction of a number. Estimate at Completion (EAC) Estimate at Completion (EAC) is a way of talking about the forecasted total cost of the project, taking into account anything that has changed since the project began.
1. Formula 1. EAC = AC + Bottom-up ETC. This formula is used when the original estimation is fundamentally flawed. It calculates the actual plus new estimate for the remaining work. 2. Formula 2. EAC =BAC/Cumulative CPI. This formula is used when the original estimation is met without any deviation.
Often referred to informally as “EAC Formula PMP,” in fact the tool is more than just a reference point for PMP® exam questions. It is a calculation that incorporates actual costs and remaining costs to provide insights into the status and future of a project budget.