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EVM question

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mandarapu
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EVM question

Postby mandarapu Thu Jul 10, 2014 11:52 am

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

Postby namita Thu Jul 10, 2014 1:05 pm

D is correct answer but before concluding it, lets discuss

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

Postby yogesh Thu Jul 10, 2014 2:53 pm

Answer D is correct.

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

Postby yogesh Thu Jul 10, 2014 3:02 pm

here EAC will be calculated using EAC=BAC/CPI

CPI=EV/AC
=80000/80000
=1

So EAC is BAC/1

so EAC is 180000
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Re: EVM question

Postby signor_rk Thu Jul 10, 2014 4:25 pm

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

Regards,

Ranjit
Regards ,

Ranjit
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Re: EVM question

Postby sunku65 Thu Jul 10, 2014 5:08 pm

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.

Answer is D
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Re: EVM question

Postby mandarapu Thu Jul 10, 2014 5:30 pm

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

Postby namita Fri Jul 11, 2014 3:20 am

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

Postby yogesh Fri Jul 11, 2014 3:33 am

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

Right ?
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Re: EVM question

Postby mandarapu Fri Jul 11, 2014 5:30 am

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.
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Re: EVM question

Postby namita Fri Jul 11, 2014 5:33 am

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
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Re: EVM question

Postby sunku65 Fri Jul 11, 2014 5:38 am

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.
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Re: EVM question

Postby mandarapu Fri Jul 11, 2014 5:50 am

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

Postby namita Fri Jul 11, 2014 11:18 am

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

Postby yogesh Sun Jul 13, 2014 12:58 am

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 ?
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Re: EVM question

Postby namita Tue Jul 15, 2014 8:03 am

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

:)
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Re: EVM question

Postby namita Tue Jul 15, 2014 8:06 am

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

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