NASA-Systems Engineering

# 492 technical performance measures status reporting

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Unformatted text preview: gram analyst to estimate the EAC at any point in the project life cycle. (See sidebar on computing EAC.) If the cost and schedule baselines and the technical scope of the work are not fully integrated, then cost and schedule variances can still be calculated, but • A receivable was late or was unsatisfactory for some reason A task is technically very difficult and requires more resources than originally planned Unforeseeable (and unlikely to repeat) events occurred, such as illness, fire, or other calamity. Computing the Estimate at Completion EAC can be estimated at any point in the project. The appropriate formula depends upon the reasons associated for any variances that may exist. If a variance exists due to a one-time event, such as an accident, then EAC = BUDGET + ACWP BCWP where BUDGET is original planned cost at completion. If a variance exists for systemic reasons, such as a general underestimate of schedule durations, or a steady redefinition of requirements, then the variance is assumed to continue to grow over time, and the equation is: EAC = BUDGET x (ACWP / BCWP). If there is a growing number of liens, action items, or significant problems that will increase the difficulty of future work, the EAC might grow at a greater rate than estimated by the above equation. Such factors could be addressed using risk management methods described in Section 4.6. In a large project, a good EAC is the result of a variance analysis that may use of a combination of these estimation methods on different parts of the WBS. A rote formula should not be used as a substitute for understanding the underlying causes of variances. NASA Systems Engineering Handbook Management Issues in Systems Engineering Although the identification of variances is largely a program control function, there is an important systems engineering role in their control. That role arises because the correct assessment of why a negative variance is occurring greatly increases the chances of successful control a...
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