This document discusses estimating the expected total cost (estimate at completion or EAC) of a project using different scenarios and formulas. It defines EAC and explains how to calculate it by adding actual costs to date and estimated future costs. Five scenarios for calculating ETC and EAC are presented: (1) assuming future performance matches past, (2) assuming 100% future efficiency, (3) assuming a new estimated efficiency, (4) re-estimating remaining work, and (5) adjusting for schedule performance. Formulas for ETC and EAC are provided for each scenario using variables like BAC, EV, CPI, and SPI. An example project is used to demonstrate calculating the EAC under each scenario.

1. Determining Estimate At
Completion
4 Scenarios & 5 Formulas

2. AGENDA
• Definition
• Calculating EAC
• EAC Scenarios & Formulas
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3. AGENDA
• Definition
• Calculating EAC
• EAC Scenarios & Formulas
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4. ESTIMATE AT COMPLETION
The expected total cost of completing all work expressed as
the sum of the actual cost to date and the estimate to
complete.
How much money is needed to complete the total project
work?
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5. Project Status
• On Control Date, some work has been completed while
some is remaining.
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COMPLETED REMAINING
TOTAL PROJECT SCOPE/WORK

6. Digramatic Representation of BAC & EAC
• Problem Statement - To calculate the expected cost of Total Project Work (EAC)
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EARNED VALUE
MONETARY VALUE OF
REMAINING WORK
ORIGINAL PROJECT BUDGET (BAC)
EAC
FORECASTED PROJECT BUDGET
ETCACTUAL COST/EXPENDITURE

7. AGENDA
• Definition
• Calculating EAC
• EAC Scenarios & Formulas
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8. Calculatng EAC
• Actual Expenditure Till Date = AC
• Estimated Future Expenditure = ETC
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EAC = (Actual Expenditure Till Date) + (Estimated Future Expenditure)
EAC = AC + ETC

9. PROJECT PLAN
• Reference
– https://www.slideshare.net/pmalik2/101-a-beginners-guide-to-earned-value-management
– https://www.slideshare.net/pmalik2/calculating-etc-in-4-different-scenarios
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Project Scope Build 80 Tables
Project Time Estimate (Duration) 5 Days
Cost Estimate Per Table $1000
Project Cost (Budget) $1000*80 = $80000

10. PROJECT STATUS – EXAMPLE PROJECT
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Work Completed 35 out of 80 tables
Actual Expenditure $36000 for building 35 tables
Remaining Project Work 45 tables
ETC Different in different scenarios
EAC ?

11. AGENDA
• Definition
• Calculating EAC
• EAC Scenarios & Formulas
– ETC Formulas Referenced from
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https://www.slideshare.net/pmalik2/calculating-etc-in-4-different-scenarios

12. SCENARIO I
• The project team believes that the project’s past
performance will continue to effect the future performance.
• The project would continue to expend money at the current
rate.
• The remaining work would be completed at
project’s current cost efficiency.
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13. SCENARIO I - FORMULA
• Generic EAC equation: EAC = AC + ETC
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EAC = AC + (BAC – EV) / CPI
ETC = (BAC – EV) / CPI
ETC Formula 1
EAC Formula 1

14. SCENARIO I - FORMULA
• Deriving Further from EAC Formula 1
• Replacing CPI with EV/AC
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EAC = AC + (BAC – EV) / CPI
ETC = (BAC – EV) / CPI
EAC Formula 1
EAC Formula 2

15. SCENARIO II
• The project team believes that the project’s past
performance will not effect the future performance.
• The irregularities of the past would not be repeated in
future.
• The remaining work would be completed at project’s 100%
cost efficiency (as per the original estimates).
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16. SCENARIO II - FORMULA
• Generic EAC equation: EAC = AC + ETC
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EAC = AC + (BAC – EV)
ETC = (BAC – EV)
ETC Formula 2
EAC Formula 3

17. SCENARIO III
• The project team believes that the project’s past
performance will not effect the future performance.
• The team also believes that project would expend money
neither at current rate nor at 100%.
• The remaining work would be completed at new cost
efficiency - CPIp.
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18. SCENARIO III - FORMULA
• Generic EAC equation: EAC = AC + ETC
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EAC = AC + (BAC – EV) / CPIp
ETC = (BAC – EV) / CPIp
ETC Formula 3
EAC Formula 4

19. SCENARIO IV
• After analysing the project’s past performance, The project team
believes that the original estimates were not good.
• The cost of remaining work should be re-estimated i.e. ETC
should be determined afresh.
• A fresh ETC can by found by estimating the cost of remaining
(unfinished) work from the Work Breakdown Structure (WBS).
• The project team can re-estimate the cost of remaining work
components (work packages and activities) and then total then
total them Upwards in the WBS to determine a fresh ETC.
• There is no ETC formula for this scenario.
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20. SCENARIO V
• To find revised project budget for completing the project work within
the Original Schedule and at the current CPI.
• Current Project Performance Efficiencies
– Schedule Efficiency - Schedule Performance Index (SPI).
– Cost Efficiency - Cost Performance Index (CPI).
• To determine the budgetary cost to complete the project work within
original schedule, we have to consider both CPI and SPI.
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EAC = AC + (BAC – EV) / (CPI * SPI)
EAC Formula 5

21. EAC CALCULATIONS - EXAMPLE PROJECT
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Scenario EAC Formula ETC Value EAC Value
I 1 & 2 $46286 $82286
II 3 $45000 $81000
III 4 $37500 $73500
V 5 $53019 $89019

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US
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