Forecasting includes making estimates or predictions of
conditions in the project’s future based on the information and knowledgeable
available at the time of the forecast. As the project progresses, the forecasts
are adjusted.
The earned value technique parameters of BAC, actual cost
(AC^c) to date, and the cumulative CPI^c efficiency indicator are used to
calculate ETC and EA, where the BAC is equal to the total PV at completion for
a schedule activity, work package, control account, or other WBS component.
Formula: BAC=total cumulative PV t the completion
Forecasting technique parameters to assess the cost or the
amount of work to complete schedule activities is called the EAC. Forecasting
techniques also help to determine the ETC, which is the estimate for completing
the remaining work for a schedule activity, work package, or control account. While
the earned value technique of determining EAC and ETC is quick and automatic,
it is not as valuable or accurate as a manual forecasting technique based upon
the performing organization providing the estimate to complete.
ETC is based on the new estimate. ETC equals the revised estimate
for the work remaining as determined by the performing organization. This more
accurate and comprehensive completion for all the work remaining considers the
performance estimate to complete all the work remaining and the performance or
production of the resource to date.
Alternatively, to calculate ETC using value data, one of the
two formulas is typically used:
ETC based on atypical variances. This approach is most often
used when current are seen as atypical and the project management team
expectations are that similar variance will not occur in the future. ETC equals
the BAC minus the cumulative earned value to date (EVC).
Formula: ETC= (BAC - EVC)
ETC based on typical variances. This approach is most often
used when current are seen as typical of future variances. ETC equals the BAC
minus the cumulative EVC (the remaining PV) divided by the cumulative cost
performance index (CPIC).
EAC using a new estimate. EAC equals the actual costs to
date (AC^c) plus a new ETC is provided by the performing organization.
Formula: EAC=AC^c + ETC
