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To Complete Performance Index (TCPI)

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Gul
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Joined: Sun Sep 17, 2017 6:40 pm

To Complete Performance Index (TCPI)

Postby Gul Thu Oct 12, 2017 1:04 pm

I am bit confused about TCPI formula in two different scenarios,

A thumb rule is that you can calculate the TCPI by dividing the remaining work by the remaining funds; i.e.

TCPI = (Remaining Work) / (Remaining Funds)

1. I have read somewhere that if you CPI/cost performance index is equal or great then 1, you will use the TCPI formula based on the BAC.

TCPI = (BAC – EV) / (BAC – AC)

2. if you CPI/cost performance index is less then 1, you will use the TCPI formula based on the EAC.

TCPI = (BAC – EV) / (EAC – AC)

Saket- would you please confirm if this is the right approach..?
manishpn
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Re: To Complete Performance Index (TCPI)

Postby manishpn Fri Oct 13, 2017 5:14 pm

you should always use EAC for TCPI calculation, ofcourse if your EAC is still equal to BAC then BAC can be used
Br,
Manish P
PMP, PMI - ACP, SAFe Agilist
http://www.izenbridge.com/blog/7-effect ... ification/
Gul
Posts: 10
Joined: Sun Sep 17, 2017 6:40 pm

Re: To Complete Performance Index (TCPI)

Postby Gul Fri Oct 13, 2017 9:31 pm

manishpn wrote:you should always use EAC for TCPI calculation, ofcourse if your EAC is still equal to BAC then BAC can be used


So it means we need to calculate EAC to make sure either it's equal to BAC or not..?
manishpn
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Re: To Complete Performance Index (TCPI)

Postby manishpn Sat Oct 14, 2017 12:26 pm

cant really say without looking at the question

can you share which question are you referring to
Br,
Manish P
PMP, PMI - ACP, SAFe Agilist
http://www.izenbridge.com/blog/7-effect ... ification/
Gul
Posts: 10
Joined: Sun Sep 17, 2017 6:40 pm

Re: To Complete Performance Index (TCPI)

Postby Gul Sun Oct 15, 2017 5:34 am

manishpn wrote:cant really say without looking at the question

can you share which question are you referring to


here are two different cases with a solution, does it make sense..?

Case 1- You are working on a project to be completed in 24 months and the BAC of the project is 200,000 USD. Twelve months have passed and 110,000 USD has been spent, and 60% of the work has been completed so far.

Budget at Completion (BAC) = 200,000 USD
Actual Cost (AC) = 110,000 USD
Planned Value (PV) = 50% of 200,000 = 100,000 USD
Earned Value (EV) = 60% of 200,000 = 120,000 USD

Cost Performance Index (CPI) = EV / AC = 120,000 / 110,000 = 1.1

Since the cost performance index is 1.1, which is greater than one, under budget. Therefore, in this case you will use the TCPI formula based on the BAC.

TCPI = (BAC – EV) / (BAC – AC)


Case 2- You have a project to be completed in 12 months and the budget of the project is 100,000 USD. Six months have passed and 60,000 USD has been spent, but on closer examination, you find that only 40% of the work has been completed so far. Find the To Complete Performance Index (TCPI) for this project.

Budget at Completion (BAC) = 100,000 USD
Actual Cost (AC) = 60,000 USD
Planned Value (PV) = 50% of 100,000 = 50,000 USD
Earned Value (EV) = 40% of 100,000 = 40,000 USD
Cost Performance Index (CPI) = EV / AC = 40,000 /60,000 = 0.67

Since the cost performance index is less than one, you are over budget. Now you will calculate the new estimate at completion and use the formula for case II which is based on the EAC.

Estimate at Completion (EAC) = BAC / CPI = 100,000 / 0.67 = 149,253.73 USD

Now, TCPI = (BAC – EV) / (EAC – AC)
manishpn
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Re: To Complete Performance Index (TCPI)

Postby manishpn Sun Oct 15, 2017 8:23 am

Just use BAC for second as well, no need to calculate EAC as you do not know what type of variance it is.
Br,
Manish P
PMP, PMI - ACP, SAFe Agilist
http://www.izenbridge.com/blog/7-effect ... ification/

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