Blog Post Image

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

Paul Naybour Paul Naybour

Published: 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.

  1. Paul says:

    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

  2. Paul says:

    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

  3. Student says:

    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.

Leave a Comment

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.