EVM is meant to be used during project execution to monitor progress and hopefully find problems early so that adjustments can be made. Forecasting is an important part of finding out how big of a deal your CPI or SPI is at this point in the project.
We'll use the same numbers from the last post, so:
- PV = $100k
- EV = $90k
- AC = $85k
- CPI = 1.06
- SPI = 0.90
BAC - Budget at Completion
- This is the total planned budget for the project (no EVM calculations)
- Let's say we estimated the total cost for this project to be $200k.
- How much is it going to cost to finish this project?
- 3 ways to get this (choose the best one for your situation):
- New estimate - go and re-estimate the work remaining. Most accurate, most time-consuming.
- EVM based on atypical variances - past performance is expected to change, use ETC = BAC - EV (or ETC = BAC - BCWP) $200k - $90k = $110k
- EVM based on typical variance - past performance is expected to continue, use ETC = (BAC - EV) / CPI (or ETC = (BAC - BCWP) / CPI) ($200k - $90k) / 1.06 = $103.8k
- This is simply what the total project is expected to cost given what you know right now
- Use the ETC from whatever method you chose to use.
- EAC = AC + ETC (or EAC = ACWP + ETC)
- So for atypical, we would say $85k + $110k = $195k
- For typical, we would say $85k + $103.8k = $188.8k
Up Next: EVM Example Part 1 - Finding PV, EV, and AC
