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EVM Question

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umeshbww
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EVM Question

Postby umeshbww Wed Sep 17, 2014 10:51 pm

At division project status meeting, a dashboard of cost metrics for each project is distributed to all attendees, and each project manager is presenting the status of their project. The metrics for one project show a BAC of $1100, an EV of $998, and a EAC of $1099. However the project manager is reporting an ETC of $354 in her presentation. What do you do?
A. Notify the appropriate management there is a calculation error.
B. Nothing.
C. Advise the project manager to take the additional funds from her project contingency budget.
D. Congratulate the project manager for being under budget.

Answer/Explanation : Option A- If ETC is being reported, then EAC should be AC + ETC. You must notify the appropriate management that there is a calculation error. Project managers are required by the PMI Code to accept ownership of their own errors, and report to the appropriate management errors they have observed being made by others.

I did not see any error because question did not mention anything on AC. also - there is a chance that project manager calculation are right because maybe CPI is above 1 due to which project manager was able to achieve EV of 998$ in less actual cost (AC). But due to some foreseen increment on project - ETC is $354 to achieve remaining EV of $102.

Is this right approach? hopefully am not missing anything from question asked.
Right option would have been Check with project manager - if found issue either confront project manager then notify the appropriate management about error.
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Parul
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Re: EVM Question

Postby Parul Fri Sep 19, 2014 5:21 am

Hi Umesh,

First Alarm should be mention of word "however" Project Manage is reporting ETC......

2ndly they havent mentioned anything about CPI so assumption would be not appropriate in this scenario, and to estimate $150 more to complete remaining work (of $102) ie. 100% more is also bit unrealistic for a project that was performed under budget.

Hope this helps !!!
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Re: EVM Question

Postby bs_pani Thu Dec 04, 2014 8:09 pm

Saket,

I am still not convinced. Based on the information AC is 745 and CPI is more than 1. So I still believe Option D is correct.
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saket
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Re: EVM Question

Postby saket Fri Dec 05, 2014 9:10 am

How will you justify these three figures presented by PM at a given point in time ?

EV of $998, and a EAC of $1099. However the project manager is reporting an ETC of $354
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sunilrana123
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Re: EVM Question

Postby sunilrana123 Tue Feb 10, 2015 3:42 pm

As we know that : EAC=AC+(BAC-EV) so if we will substract AC from both side we will get
EAC-AC= AC+(BAC-EV)-AC
EAC-AC=BAC-EV as we know EAC= AC+ETC so ETC= EAC-AC

now
ETC=BAC- EV=1099-998=101

But manager is reporting 354. which is not equal to 101. So manager is reporting wrong.

Hope this will help.

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