Reply: Question: "Variance will probably remain same" vs "Variance will not occur again" ETC/EAC

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Topic History of : Question: "Variance will probably remain same" vs "Variance will not occur again" ETC/EAC

Max. showing the last 6 posts - (Last post first)
3 years 1 month ago #8809

Kelly Coughlin

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Thanks for the reply Cornelius!
3 years 1 month ago #8808

Cornelius Fichtner

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Kelly,

Here is the explanation:

"variances will probably remain the same" means that we currently have a variance of X and that this variance will remain until the end of the project.

"variances will probably not occur again" means that we currently have a variance of X but this variance will go away and the project will be back on track until the end. Note that it says "variances will probably NOT occur again".

If the exam question does not use the exact wording then simply ask yourself this: Will the variance stay the same or will it got away? The answer to that question will tell you which formula to you.
3 years 1 month ago #8800

Kelly Coughlin

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Ok, I am quite confused by the wording for EAC & ETC formulas, particularly:

EAC = BAC / CPI
Assumption: use formula if current variances will probably remain the same through the end of the project.
vs
EAC = AC + (BAC - EV)
Assumption: use formula if current variances will probably not occur again through the end of the project, which means the original budget is more reliable

Doesn't "variance will remain the same" equate to "Variance will not occur again"? How do you know which formula to use if the wording is not precise in the question?

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