Estimate to Complete (ETC)
Estimate to Complete (ETC) is the expected cost needed to finish all remaining project work from the current point in time.
Explanation
ETC represents the cost forecast for the work that has not yet been completed. It answers the question: How much more will it cost to finish the project? The relationship between EAC, AC, and ETC is: EAC = AC + ETC, which can be rearranged to ETC = EAC - AC.
When current performance is expected to continue, ETC is calculated as: ETC = (BAC - EV) / CPI. When past variances are considered atypical and future work is expected to proceed at the budgeted rate: ETC = BAC - EV. A third approach is to develop a completely new bottom-up estimate for the remaining work.
ETC is useful for determining how much additional funding may be needed and for making decisions about whether to continue, modify, or terminate the project. It should be reviewed periodically as project conditions change.
Key Points
- •ETC = EAC - AC (general relationship)
- •Typical variance: ETC = (BAC - EV) / CPI
- •Atypical variance: ETC = BAC - EV
- •Can also be a new bottom-up estimate for remaining work
Exam Tip
ETC answers: How much more will it cost? The most common calculation is ETC = EAC - AC. If you know CPI, use ETC = (BAC - EV) / CPI.
Frequently Asked Questions
Related Topics
Estimate at Completion (EAC)
Estimate at Completion (EAC) is the expected total cost of completing all work, calculated by projecting current performance into the future.
Cost Performance Index (CPI)
Cost Performance Index (CPI) is an EVM efficiency metric that measures cost performance as the ratio of earned value to actual cost: CPI = EV / AC.
Variance at Completion (VAC)
Variance at Completion (VAC) is the projected difference between the budget at completion and the estimate at completion: VAC = BAC - EAC.
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