## Is this formula right

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suresi00
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Posts: 150
Joined: Mon Nov 20, 2017 4:05 pm

### Is this formula right

u are managing a project and your project has allocated with a two trained resources which can impact the cost performance index as you have replaced them with four other resources, the cost performance index with after this resource shuffling is 1.25. You know that this is a typical source of variance in project. The project is budgeted at \$18,000, out of which \$10,000 has been earned back. \$8,000 has already been spent. What is the estimate of the cost at completion?

14,000

14,400

16,000

12,000
- Solution
As it is given that variances caused by resource shuffling is typical, formula that can be used to calculate EAC is AC + (BAC –EV)/ CPI (As CPI will be influencing the remaining work). EAC = 8,000 + (18,000 – 10,000) / 1.25 = 14,400
manishpn
Expert
Posts: 2590
Joined: Sat Jan 04, 2014 3:55 pm

### Re: Is this formula right

EAC = AC + ETC
ETC = Budget cost for remaining work should be changed as per the Cost Performance Index
ETC = (BAC – EV) / CPI
EAC = AC + (BAC-EV)/ CPI
Br,
Manish P
PMP, PMI - ACP, SAFe Agilist
http://www.izenbridge.com/blog/7-effect ... ification/
suresi00
Contributor
Posts: 150
Joined: Mon Nov 20, 2017 4:05 pm

### Re: Is this formula right

PMbok doesn' have
AC+(BAC-EV)/CPI.

It only says without CPI because the assumption was we will move as planned which means CPI=1

When do we use the formula
AC+(BAC-EV)/CPI.

When CPI is impacted by adding more resources ?

Considering atypical scenario
manishpn
Expert
Posts: 2590
Joined: Sat Jan 04, 2014 3:55 pm

### Re: Is this formula right

question says its typical source of variance
Br,
Manish P
PMP, PMI - ACP, SAFe Agilist
http://www.izenbridge.com/blog/7-effect ... ification/
suresi00
Contributor
Posts: 150
Joined: Mon Nov 20, 2017 4:05 pm

### Re: Is this formula right

AC = AC + (BAC-EV)/ CPI
This formula is not in PMbok. So I am confused,

They have with CPI and SPI
manishpn
Expert
Posts: 2590
Joined: Sat Jan 04, 2014 3:55 pm

### Re: Is this formula right

yes but use the one i said,
you can use the formula mentioned if AC is not given and variance is typical
Br,
Manish P
PMP, PMI - ACP, SAFe Agilist
http://www.izenbridge.com/blog/7-effect ... ification/

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