Estimating Cost at Completion

Bill Carmody explains the concept of Estimating Cost at Completion (EAC), a method used to predict the total cost of a project once completed. EAC is calculated by summing the current investment and the cost needed to finish the work. It helps project managers reassess costs when unforeseen events occur, ensuring better resource management and preventing negative impacts on project value. Regular EAC checks can identify overspending and aid in resource allocation. Adaptive EAC models provide insights for future planning and real-time decision-making, helping stakeholders make informed business decisions.

What is the primary purpose of estimating cost at completion (EAC) in project management?

• To calculate the initial budget of a project

• To determine the total cost of a project once completed

• To evaluate team performance

• To assess the quality of project deliverables

How does EAC help in managing unforeseen events during a project?

• By reassessing the total cost required to complete the project

• By eliminating all project risks

• By increasing the project budget

• By providing a fixed cost estimate

What is one of the benefits of regularly calculating EAC?

• It ensures all team members are satisfied

• It eliminates the need for project managers

• It helps detect areas of overspending

• It guarantees project success

How does an adaptive EAC model assist stakeholders?

• By reducing the need for communication

• By providing a static project plan

• By helping understand priorities and identify resource allocation opportunities

• By ensuring all projects are completed ahead of schedule

Why is it important to use EAC proactively in project management?

• To ensure stakeholders are unaware of project changes

• To provide stakeholders with a comprehensive view of project impacts

• To delay decision-making until the project ends

• To avoid any changes to the project plan