The following data is received from your contractor: Budgeted Cost of Work Perfo

Question

The following data is received from your contractor: Budgeted Cost of Work Performed (BCWP) = $200 Cost Performance Index (CPI) = 0.8 Budgeted Cost of Work Scheduled (BCWS) = $300 Schedule Performance Index (SPI) = 0.66 Actual Cost of Work Performed (ACWP) = $250 Budget at Completion (BAC) = $800 Contractor's Latest Revised Estimate = $900 Equation for Estimate at Completion (EAC) Low = ACWP+((BAC-BCWP)/(CPI)) Equation for EAC High = ACWP+((BAC-BCWP)/(CPI*SPI)) Which of the following represents the most reasonable EAC range for these data based on Earned Value Management (EVM)? EAC Low: $900 - EAC High: $1,500 EAC Low: $1,000 - EAC High: $1,386 EAC Low: $900 - EAC High: $1,375 EAC Low: -$1,000 - EAC High: $1,500

Explanation / Answer

Given Budgeted Cost of Work Performed (BCWP) = $200

Cost Performance Index (CPI) = 0.8

Budgeted Cost of Work Scheduled (BCWS) = $300

Schedule Performance Index (SPI) = 0.66

Actual Cost of Work Performed (ACWP) = $250

Budget at Completion (BAC) = $800

Now using the above values we use the equation for Estimate at Completion

(EAC) Low = ACWP+((BAC-BCWP)/(CPI)) = 250+((800-200)/0.8)=250+(600/0.8)=250+750=$1000

EAC High = ACWP+((BAC-BCWP)/(CPI*SPI))=250+((800-200)/0.8*0.66)=250+ (600/0.528)=250+1136.3636=$1186.3636

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