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Forecasting

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

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