The idea behind forecasting is that you can use Earned Value to come up with a pretty accurate prediction of what your project will look like when it’s at completion.
If you know your CPI now, you can use it to predict what your project will actually cost when it’s complete. Let’s say that you’re managing a project with a CPI of 0.8 today. If you assume that the CPI will be 0.8 for the rest of the project—and that’s not an unreasonable assumption when you’re far along in the project work—then you can predict your total costs when the project is complete. We call that Estimate at Completion (EAC).
Estimate at Completion (EAC) here is one way to calculate it:
- Estimated budget at completion
- EAC = BAC / CPI
- Estimated Schedule at completion
- (Total Planned Hrs) / SPI = hrs @ completion
- cost Variance at Completion (VAC)
- VAC= BAC - New BAC