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(EVM-3251) How to Calculate Estimate at Completion at a Project Level

Level: Basic
Venue: 2019 AACE International Conference & Expo, June 16-19, 2019, New Orleans, LA, USA

Abstract: This paper discusses two different methods of calculating estimate at completion adopted by two different software. Seamless reporting of EAC is essential. Differences between software on how estimate at completion (EAC) is calculated at a project level can confuse and mislead project management professionals, especially if these differences result in extreme project performance indicator variances from one software to another.

This paper compares between two methods of two scheduling software packages (MS Project and Primavera P6) used to calculate EAC at a project level:
  1. Adding up EAC for all control accounts on a project, at their appropriate levels to generate the EAC of the project.
  2. Adding up actual costs and earned value for all control accounts on a project at their appropriate levels, calculating the project’s cost performance index (CPI), and using this CPI to calculate EAC.
The paper also discusses different examples that will magnify the issue discussed. This paper also outlines the accuracy of method 1 above, compared to method 2. The goal of this paper is to be the first step of gaining consensus on how EAC is calculated at a project level.