## EVM question

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mandarapu
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### EVM question

Earned value analysis of your project shows the following values: EV = 80,000, ETC = 90,000, EAC = 180,000, PV = 100,000, AC = 80,000. Which of the following is true regarding the project?

A.The project is ahead of schedule and on budget
B.The project on schedule and below budget
C.The EAC is incorrect
D.The project behind schedule and on budget

What is the right answer ?. Want to know why C cannot right ?.
namita
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### Re: EVM question

D is correct answer but before concluding it, lets discuss

Why you feel EAC is not correct.. on what basis?
yogesh
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### Re: EVM question

he might have done EAC= AC + ETC
by this EAC will be =170000
yogesh
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### Re: EVM question

here EAC will be calculated using EAC=BAC/CPI

CPI=EV/AC
=80000/80000
=1

So EAC is BAC/1

so EAC is 180000
signor_rk
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### Re: EVM question

This question has two correct answers : Options #C & D. Seems , the question is not set perfectly !!!

Regards,

Ranjit
Regards ,

Ranjit
sunku65
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### Re: EVM question

It is Simple:
SPI=80K/100K=.80 behind schedule
CPI=80K/80K=1.00 on budget

If you consider EAC is incorrect, on what formula basis you think to calculate. There is no clue.

mandarapu
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### Re: EVM question

Yes...there C,D are correct and that is why I posted this que.
namita
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### Re: EVM question

One thing we need to remember if not explained in question that scenario is typical or atypical. ...always calculate Eac with cpi formula.
yogesh
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### Re: EVM question

atypical means variances are there at current stage and not expected to occure in future.
typical means current variance will continue in future.

Right ?
mandarapu
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### Re: EVM question

atypical mean going in proportionate with BAC and typical is typical to budgeted so variance by current spending trend - i.e by current CPI...ofcourse as namita also told by default we need to apply this.
namita
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### Re: EVM question

Yes Yogesh and mandarapu. Pasting below some details from other thread

What is typical? Say we are having a procurement in our project and supply got delayed due to one machine of supplier got damaged. Now supplier told that this machine is an imported one and will not be fixed soon so this delay is going to continue may be for the full project lifetime. When we have such scenario, where we know that condition occurred will continue at the same rate we call it as typical. What we do in that case is, we calculate current variance and calculate the new estimate considering this variance there through out.

ETC = EAC-AC

What is atypical? think of similar scenario but in atypical case delay happened is due to traffic jam and this is a one time scenario. which is not likely to occur again

ETC = (BAC-EV) because EAC = AC + (BAC-EV) in case of atypical

There is one more variant, EAC = AC + [(BAC – EV) / (CPI × SPI)]. This formula is there in PMBOK5 under forecasting of control cost process. From this ETC = [(BAC – EV) / (CPI × SPI)]

this variant of ETC or EAC is used when we need to take care of schedule variations also to calculate remaining estimate or EAC. Basically there are 3 aspects you need to observe in question to use this formuls

point #1 typical variation in cost so CPI is required
Point#2 variations in schedule, SPI is required
Point #3 firm dates asked by sponsor, when someone is asking firm dates all kind of variations has to be considered so CPI and SPI both can help in that case
sunku65
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### Re: EVM question

mandarapu wrote:Yes...there C,D are correct and that is why I posted this que.

@Mandara

Can you justify why C is correct with explanation or using which formula and why.
mandarapu
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### Re: EVM question

Sorry C is not right per Namita told.
namita
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### Re: EVM question

Yes Mandarapu. If you feel its right, share your justification for further discussion
yogesh
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### Re: EVM question

So i summarize my understanding

1. EAC=BAC/CPI ( no variance ..CPI is at same rate ..Or there is no clue)
2.EAC=AC+(BAC-EV) ( atypical mean there was variance one time but its no more applicable)
3.EAC=AC+(BAC-EV)/CPI (typical means variance will going to continue through out the prject)
4.EAC=AC+(BAC-EV)CPI*SPI (schedule is strict and must meet the date)
5.EAC=AC+ETC (Original estimate are no longer valid)

Is this correct ?
namita
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### Re: EVM question

Right...BTW 1 & 3 are same...how? see below

EAC=AC+(BAC-EV)/CPI

(BAC-EV)*AC/EV

(BAC*AC/EV) - AC

BAC/CPI

Just substitute CPI = EV/AC

namita
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### Re: EVM question

also we are coming up with a blog/video also for this .. so that we are no more struggling on these variants