## earn value question

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joseph
Posts: 2
Joined: Tue Apr 05, 2016 12:23 pm

### earn value question

Hi sir ,

could you advise me the following question as shown below:

Question
A work package has a budget of \$2400 to purchase 120 stainless steel parts at \$20 per part. When the plan is developed in October 2004, the plan is to take delivery of the first 50 parts in January 2005 , next 40 parts in February 2005 and remaining 30 parts in March 2005 .

An overseas supplier is selected and the order of parts is placed. Unfortunately , due to stainless steel price hike, the price per part has increased to \$30 at the start of production. In addition, due to manpower shortage because of a mass resignation of supplier's workforce . only 30 parts are delivered at the end of january 2005 and 35 parts are delivered at the end of February 2005, but the supplier has provided assurance that the remaining parts will be delivered by end of the march 2005 .

1) what is the budget at completion
2) what is the earned value of work completed
3) what is the actual value of work performed
4 ) what is the cv
5) what is the sv
6) what is the ETC
7) what is the EAC
joseph
Posts: 2
Joined: Tue Apr 05, 2016 12:23 pm

### Re: earn value question

is bac is \$2400 ?
raviganti
Posts: 19
Joined: Wed Mar 30, 2016 6:20 pm

### Re: earn value question

1) what is the budget at completion = 2400
2) what is the earned value of work completed = EV = (30x20) + (35x20) = 1300
3) what is the actual value of work performed = AC = (30x30) + (35x30) = 1950
4 ) what is the cv = EV - AC = 1300 - 1950 = -650
5) what is the sv = EV - PV , PV = (50x20) + (40x20) = 1800 sv = 1300 - 1800 = -500
6) what is the ETC = BAC/CPI = CPI = EV/AC = 1300/1950 = 0.667 , ETC = 2400/.0667 = 3598
7) what is the EAC = AC + ETC = 1950 + 3598 = 5548.

Thanks
R.
raviganti
Posts: 19
Joined: Wed Mar 30, 2016 6:20 pm

### Re: earn value question

correction -
6) what is the ETC
We need to apply this formula for ETC = (BAC - EV) . Since supplier has assured that he will supply remaining units in March 2005, meaning., this can be taken as atypical situation
= Therefore ETC = 2400-1300 = 1,100

7) what is the EAC = AC + ETC = 1950 + 1100 = 3050
Prembalaji
Participant
Posts: 73
Joined: Wed May 10, 2017 1:38 pm

### Re: earn value question

My Views on 6.ETC and 7.EAC

"due to stainless steel price hike, the price per part has increased to \$30 at the start of production"

Hence

EAC is straightforward : 30 *120 = 3600

ETC = (Work Remaining) \$
Work remaining is 120-65=55
Work Remaining (55*30)=1650

Can someone validate my calculation
Cheers,
PJ