## EVM question

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deepak_kavathe87
Posts: 2
Joined: Fri Sep 22, 2017 6:48 pm

### EVM question

Mark is in execution phase of the road construction project in a town which has total duration of 12 months and work effort evenly distributed. 3 months down the line during the execution phase mark realizes that there is a change in local law which demands sound proof fencing of the road passing near the hospitals and School. This task was not foreseen and not included in cost baseline of USD Mn 18. Mark submits a Change request to CCB. While total cost budget for project is USD 25 Mn CCB approves to use USD 2 Mn for additional work from Management reserves to baseline. Ion Mark has been informed that there will be fluctuation in price of cement and timely delivery could also be impacted due to shortage in supply. At the end of 6th month mark present following performance graph to Steering group. Steering Group is keen to complete the project on time and budget and asks Mark about his opinion on how much more will he need to complete the project. Mark answer should be

There is one atypical variance which had resulted in revision of cost baseline as Management reserve of 2Mn was used. However there is also known variances that would occur in future which will impact cost and schedule. In situations where project has to complete on time and variances of both cost and schedule would occur in future, EAC = AC+ ((BAC-EV)/(SPI*CPI))

AC= 11

BAC= 20

SPI= EV/PV= 10/9 = 1.11

CPI= EV/AC = 10/11= 0.9

EAC = 11+ ((20-10)/(1.11*0.9))= 21

ETC = EAC - AC = 10

CAN ANY ONE EXPLAIN ME HOW THIS IS ARRIVED