Reporting and Forecasting
Core concepts
Forecasting projects final cost from current performance. The most common Estimate at Completion formula is EAC = AC + (BAC − EV) ÷ CPI, assuming remaining work performs at the cumulative CPI. Variants: EAC = AC + (BAC − EV) (atypical variance, future work at plan), EAC = BAC ÷ CPI (when current variances are expected to persist), and EAC = AC + bottom-up ETC. Estimate to Complete (ETC = EAC − AC) and Variance at Completion (VAC = BAC − EAC) round out the forecast set. Reporting uses formats such as the cost performance report, variance analysis, and the S-curve comparing PV, EV, and AC over time.
Traps to watch
The dominant trap is selecting the wrong EAC formula. If the question says variances are typical and expected to continue, use the CPI-based formula; if the variance was one-time/atypical, add the remaining budget at plan. Watch for EAC questions that give an independent ETC - then EAC = AC + ETC directly. Another trap: confusing ETC (remaining) with EAC (total). Candidates must also recognize that a CPI-based forecast assumes efficiency stays constant, which is optimistic if performance is deteriorating.
Rule of thumb
Typical/continuing variance → divide remaining budget by CPI. Atypical/one-time variance → add remaining budget at face value. Independent ETC given → EAC = AC + ETC.
Worked example
BAC = $150,000, EV = $60,000, AC = $75,000, CPI = 0.80. Typical variance: EAC = AC + (BAC − EV) ÷ CPI = 75,000 + (90,000 ÷ 0.80) = 75,000 + 112,500 = $187,500. VAC = 150,000 − 187,500 = −$37,500 (overrun).