This lesson focuses on project completion formulas and offers examples of how the following formulas work: Estimate at Completion (EAC) Estimate to Complete (ETC) Variance at Completion (VAC) To Complete Performance Index (TCPI) toggle_content title="Transcript" The next couple of formula s is estimate to completion, estimate to compete, variance ...
This lesson focuses on project completion formulas and offers examples of how the following formulas work:
- Estimate at Completion (EAC)
- Estimate to Complete (ETC)
- Variance at Completion (VAC)
- To Complete Performance Index (TCPI)
[toggle_content title="Transcript"] The next couple of formula s is estimate to completion, estimate to compete, variance at completion and to complete performance index (TCPI). Estimate to completion, I am going to take my budgetary completion. At day hundred, I say that was a hundred thousand dollars and I am going to divide that by my CPI. If you remember from the previous slide, my CPI is .7. Budget at completion divided by CPI. I did that on my phone so the number is $142857.14. Using the CPI if I can continue at the right then I was on day four. This project is going to cost me a lot of money. It is going to cost me $142857.14.The next thing to figure out is the estimate to complete. The estimate to completion is picking your estimate at completion and subtracting your actual cost. I am going to take $142857.14 and I am going to subtract the actual cost. Where am I today? 5000. To complete this project I need to have $137857.14 . For estimate to complete, I am taking the estimate at completion and subtracting the actual cost. We are on day four, I am taking the number I just got from estimate at completion $142857.14 and am putting it here. I am subtracting day four so my actual cost is $5000. When I subtract $5000 from this number I come up with $137857.14. That's how much money I need in order to complete the project. Next formula is variance at completion. I am going to take my estimate at completion (EAC), and I am going to subtract my budget at completion. So at day 100 it's supposed to be $100,000. $142857.14 minus $100,000, this gives me $42857.14.This number is big because it is trying to figure out how much over budget I am going to be so $42857.14 is what I am going to be over budget. Using that formula we are going to take the budget at completion minus the end buyer and budget at completion minus the actual cost. We are going to divide this too. In this scenario the budget at completion is supposed to be $100,000. I am subtracting the earn value for day four so subtract $3500 which gives me $96500. The budget at completion minus the actual cost is $100,000 minus $5,000. Which gives me $95000. When I divide this too I get 1.02. what is this telling me. This is telling me how efficient I need to be to finish my project and beyond budget. For every dollar that is planned, I need to be as efficient as...am getting a dollar and two cents for every dollar that I spend. That is the only way to get my project back on schedule from day four up to day 100 to finish at $100,000. To close the cost knowledge area, you need to have an understanding of the formulas. You also have to know the processes and the inputs and the outputs and tools. With that information, you should be very well on the test. [/toggle_content]
Our online PMP training educates on how to initiate, plan and manage a project, as well as the process behind analyzing risk, monitoring and controlling project contracts and how to develop project schedules and budgets.
Enhance your effectiveness at managing project teams and distinguish yourself as a highly successful global ...
PMI Project Management Professional PMBOKv5 practice exam helps to prepare for PMI's PMP certification exam. ...