| To register cost forecastIf you want to see cost forecast on your project use either
cost objects or cost types: - If you use cost objects,
you can maintain the cost forecast for all cost objects related to elements and
activities and use the forecast in the Control Inquiries (tpppc4850m000) session, the Display Financial Analysis (Graph) (tppss0701m000) session, and the Generate Financial Interim Results (tpppc2260m000) session.
- If you use cost types,
you can only maintain the cost forecast for activities, and use the forecast in
the Performance Measurement (tpppc5840m000) session and the Performance-Measurement using EVM (Graph) (tppss0702m000) session.
How you register the
cost forecast depends on the leading forecast method, which you defined in the PPC Parameters (tpppc0100s000) session. Use a forecasting method to predict changes
to the budget, or to predict extra costs or to predict the total project cost.
These forecasts are displayed in performance measurement and monitoring. In the following procedures, generate forecast is performed
with the Generate Cost Forecast Input by Cost Object (tpppc2216m000) session or the Generate Cost Forecast Input by Activity/Cost type (tpppc2226m000) session. The following check boxes can be found in the
mentioned sessions and are referred to in the forecast procedures: - Generate Empty Forecast
- Generate from Previous Date
- Generate from Budget
Estimate-at-completion (EAC) Estimate-at-completion (EAC) is forecasting the final stage
of the project. The advantage is that the cost forecast is hardly influenced by
changes in the actual costs or the budget. Therefore, you do not have to
register frequently and still be accurate. To calculate the
variance-at-completion (VAC), at least one valid registered cost forecast is
required for each piece of budgeted work in the project scope. The procedure for the leading forecast method
estimate-at-completion (EAC) is as follows: - In the Generate Cost Forecast Input by Cost Object (tpppc2216m000) session or the Generate Cost Forecast Input by Activity/Cost type (tpppc2226m000) session, select the Generate from Budget check box and generate cost
forecast. The initial estimate-at-completion uses your budget by default.
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If you want to insert the cost forecast periodically,
you can do this in the following ways: - If parts of the project scope require a new forecast,
insert a new cost forecast in the Cost Forecast by Cost Object (tpppc2816m000) session for the current date.
- If a large part of the project scope requires a new cost
forecast, entering a new forecast can be laborious, therefore, you must
generate the forecast records for the new date. Subsequently, you can go
through the generated cost forecast records and modify the forecast
values.
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You can generate the forecast records in the following
ways: Select the Generate from Budget check box to generate cost
forecast. Select this check box if changes occur in the entire
budget. The advantage of this check box is that budget changes are visible if
you enter new values. The disadvantage of selecting this check box is that the
new forecast (budget value) overrules the existing forecast values for parts of
the project scope that had no changes in the budget. Select the Generate from Previous Date check box to generate
cost forecast. Select this
check box if the budget is completely changed. The advantage is that previous
forecast values are visible if you enter new values.
If you want to monitor the result of the EAC
procedure: - The variance at completion (VAC) in the Control Inquiries (tpppc4850m000) session, the Performance Measurement (tpppc5840m000) session, and the Performance-Measurement using EVM (Graph) (tppss0702m000) session is: budget at completion (BAC) minus estimate
at completion (EAC).
- The entered forecast amount can be displayed as planned cost
in the Display Financial Analysis (Graph) (tppss0701m000) session.
- The entered estimate at completion (EAC) is transferred to an
estimate to complete (ETC) figure. The following calculation is used: estimate
to complete (ETC) = estimate at completion (EAC) minus actuals.
Estimate-to-complete (ETC) Estimate-to-complete (ETC) means to forecast the remaining
work. However, ETC is a time-consuming method of forecasting, because the
remaining work decreases day by day. To calculate the variance-at-completion
(VAC), at least one valid registered cost forecast is required for each item of
budgeted work in the project scope. The procedure for estimate-to-complete (ETC) is as follows: - You can start with the
control budget as base. Generate cost forecast with the Generate from Budget check box selected. At this
point the estimate-to-complete has the same value as the budget, as work has
not yet started, and no progress is booked yet.
- If progress is made,
you must register the cost forecast in the Cost Forecast by Cost Object (tpppc2816m000) session for that date. To reduce the
effort of entering data, you can generate the cost forecast with the Generate from Previous Date check box selected. You
now get a new forecast based on the following formula. Forecast new date =
forecast previous date minus cost occurred between the previous and new date.
To take any costs into account that occurred in the intervening period, you
must use the leading forecast method estimate-to-complete (ETC).
- If the work is
completed, the estimate-to-complete must be zero. Select the Generate Empty Forecast check box and generate cost
forecast.
If you want to monitor the result of the ETC procedure: - The variance at
completion (VAC) in the Control Inquiries (tpppc4850m000) session, the Performance Measurement (tpppc5840m000) session, and the Performance-Measurement using EVM (Graph) (tppss0702m000) session is: budget at completion (BAC) minus estimate
to complete (ETC) minus actual costs.
- In the Display Financial Analysis (Graph) (tppss0701m000) session, the entered estimate to
complete (ETC) forecast amount can be displayed as planned cost.
Estimated-extra-cost (EEC) Estimated-extra-cost (EEC) means that you forecast on top of
the budget. If the budget is not correct, you can either change the budget or
forecast the budget deviation. If you choose to forecast the budget deviation,
you only need to register forecast for that part of the project scope in which
budget deviations are expected. However, you must still change your forecast if
changes in the budget occur. The procedure for estimate-extra-cost (EEC) is as follows: - Initially, if parts of
the project scope require a forecast, you insert a new cost forecast in the Cost Forecast by Cost Object (tpppc2816m000) session for the current date.
-
If you want to insert the cost forecast periodically,
you can do this in the following ways: - If parts of the project scope require a new forecast,
insert a new cost forecast the Cost Forecast by Cost Object (tpppc2816m000) session for the current date.
- If a large part of the project scope needs a new cost
forecast, generate the forecast records for the new date. You can then go
through the generated cost forecast records of the new date and modify the
forecast values if necessary. Generate cost forecast with the Generate from Previous Date check box selected. The
advantage of using this check box is that previous forecast values are visible
if you enter new values.
- If the work is
completed, the estimate-to-complete must be zero. To reduce the work of
entering data, you can generate cost forecast with the Generate Empty Forecast check box selected.
If you want to monitor the result of the EEC procedure: - The variance at
completion (VAC) in the Control Inquiries (tpppc4850m000), the Performance Measurement (tpppc5840m000), and the Performance-Measurement using EVM (Graph) (tppss0702m000) is cost variance (CV) minus estimated extra cost
(EEC). Where cost variance (CV) is performed minus actuals.
- In the Display Financial Analysis (Graph) (tppss0701m000) session, the entered estimated extra
cost (EEC) forecast amount can be displayed as additional planned cost on top
of the budget.
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