Lab Project #$7(15$ pts$.)$

IS$187/$ MGMT $158$ S$2020$

Example $($EAC$)$ Case$-$I:

You have a project which is worth $500,000$ USD. Seven months have passed and

$350,000$ USD has been spent. Upon closer review you find that only $60\%$ of the work is

completed; however, as per the schedule, $65\%$ of the work should have been completed.

Determine the Estimate at Completion $($EAC$).$

Solution:

Estimate At Completion $=($Budget At Completion$)/($Cost

Performance Index$)$ EAC $=$ BAC$/$CPI

And,

Cost Performance Index $=($Earned

Value$)/($Actual Cost$)$ CPI $=$ EV$/$AC

Earned Value $=60\%$ of BAC

$=0\mathrm{.}6*500,000$

$=300,000$

Actual Cost

$=350,000$

Hence,

CPI $=($Earned Value$)/($Actual Cost$)$

$=300,000/350,000$

$=0\mathrm{.}86$

Hence,

EAC $=500,000/0\mathrm{.}86$

$=581,395$

Hence the Estimate at Completion $($EAC$)$ is $581,395$ USD.

$2$

$***$

Practice Question: $11$

You have recently joined an ongoing project. The cost of the project is $350,000$ USD,

and $150,000$ USD has already been spent and $40\%$ of the work is actually completed.

However, according to the schedule, $43\%$ of the work should have been completed to

date.

Determine the EAC.