POSTER 15
Section 5 · Earned Value Management — Forecasting
EVM Forecasting: EAC · ETC · VAC · TCPI
Performance to date predicts the finish. EAC forecasts the total cost, ETC the cost of what's left, VAC the projected over/under, and TCPI the efficiency you must now sustain to hit a target. Pick the EAC formula that matches your assumption about the remaining work.
Visual Map — Choosing Your EAC (assumption → formula)
| Assumption about the remaining work | EAC formula | Reading |
|---|---|---|
| Current variance was a one-off / atypical | EAC = AC + (BAC − EV) | finish the rest at the budgeted rate |
| Current cost efficiency continues (the default) | EAC = BAC ÷ CPI | today's CPI holds to the end |
| Both cost & schedule pressure continue | EAC = AC + (BAC − EV) ÷ (CPI × SPI) | schedule drag worsens cost |
| Original estimate is no longer valid | EAC = AC + bottom-up ETC | re-estimate the remainder |
The Forecasting Family
- BAC
- Budget at Completion — the baseline total (the plan).
- EAC
- Estimate at Completion — forecast total cost.
- ETC
- Estimate to Complete — cost of the remaining work.
- VAC
- Variance at Completion — projected over/under at the end.
- TCPI
- To-Complete Performance Index — efficiency needed from here.
Core Formulas
ETC = EAC − AC
what's left to spend
VAC = BAC − EAC
+ under · − over at end
TCPI = (BAC − EV) ÷ (BAC − AC)
to still hit BAC
TCPI = (BAC − EV) ÷ (EAC − AC)
to hit the new EAC
Worked Example (same numbers)
| From Poster 14 | Value |
|---|---|
| BAC / EV / AC | 100 / 40 / 45 |
| CPI / SPI | 0.89 / 0.80 |
| EAC = BAC/CPI | $112.5k |
| ETC = EAC−AC | $67.5k |
| VAC = BAC−EAC | −$12.5k |
| EAC (cost×sched) | ≈ $129k |
| TCPI→BAC | 1.09 |
Reading TCPI
- TCPI = work remaining ÷ funds remaining.
- Compare to your CPI: TCPI 0.89 vs CPI 0.89 = on track.
- Here TCPI 1.09 > CPI 0.89 → you must run better than you ever have → the BAC is likely unrecoverable.
- Response: re-baseline, de-scope, or accept the overrun.
Exam Concepts
- ETC = EAC − AC; VAC = BAC − EAC.
- EAC = BAC/CPI is the default "current-trend" forecast.
- Know all four EAC formulas & their assumptions.
- TCPI > 1 (and > CPI) = must tighten up; recovery is hard.
Executive View
- EAC & VAC answer the board's question: "Where will we land?"
- TCPI tells you if a recovery target is realistic before you promise it.
- Forecasts trigger re-baselining & funding decisions.
Industry Example
Capital Project
- The $100k line upgrade now forecasts $112.5k (EAC) with a −$12.5k VAC. TCPI 1.09 says recovery to budget is unlikely → present a re-baseline + a de-scope option.
Memory Hooks
- BAC=plan · EAC=forecast · ETC=what's left · VAC=the surprise.
- "ETC peels AC off EAC."
- If TCPI > CPI, you're in trouble.
60-sec Review
4 EAC formulas + assumptions
ETC and VAC formulas
Both TCPI formulas
TCPI vs CPI meaning
Recompute EAC from CPI
PMI Visual Wall · Poster 15 · EVM — Forecasting (EAC/ETC/VAC/TCPI) · original instructional design · A3 landscape