Real-world Applications and Case Studies
1. Construction Project
Scenario:
Your operational tasks include erecting a new office complex. The first phase of the project fixed the budgets for integral items such as materials, labor, and other pending expenses.
Application:
During a project, plans are liable to deviate from the forecasts and unforeseen disruptions appear. The project manager refers to the EAC to check the total cost, supposing the facts of costs that have been incurred, as well as the estimate of expenses that remain based on the current position of the project.
2. Information Technology (IT) Project
Scenario:
An IT project will be to implement a new software application using set funding and schedule.
Application:
Midway through, the project development team faced unforeseen technical problems that added to the delay of the projects and additional costs. The PM puts the EAC to use to reschedule the budget and predict the new projection of the total expenditure at the project completion, taking into consideration the newly received information and possible extra expenses.
3. Manufacturing Project
Scenario:
A project in manufacturing seeks to create a new product as compared to the others while keeping its costs and production goals in mind.
Application:
In that case, the unpredicted prices of raw materials upset the project’s budget. The manager during this period will calculate the EAC by using the actual cost and projecting subsequent expenses so that the project will not overshoot the estimated budget.
What Is Estimate at Completion in Project Management (EAC)?
Estimate at Completion (EAC) is a crucial concept in project management, providing project managers with a forecasted total cost based on current performance and expenditures. By evaluating actual costs and estimating remaining expenses, EAC helps project teams anticipate the financial requirements for successful project completion. The utilization of various calculation methods adds flexibility to adapt projections as projects evolve, enhancing the precision of cost predictions.
Table of Content
- What is the Estimate at Completion in Project Management (EAC)?
- Importance of Estimate at Completion (EAC)
- Methods for Calculating EAC
- EAC Formulas and Techniques
- Example Problems
- Factors Influencing EAC Accuracy
- Real-world Applications and Case Studies
- Limitations and Challenges of EAC
- Best Practices for Using EAC in Project Management
- Conclusion: Estimate at Completion in Project Management
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