The Power of Probabilistic EAC Analysis with KAT

We recently received a request to calculate the Estimate at Completion (EAC) for a Project. The request seemed somewhat unusual because the Project Control team was issuing EAC figures every month. The Project was already 80% complete, and the Client wanted a more accurate EAC to justify their request for additional budget. The monthly EAC figures were constantly changing, causing confusion!!

Important Note: The scope of the EAC calculation was specifically for the PMC contractor and not the EPC contractor. We did not calculate the EAC for the EPC contractor!

Our solution was to calculate a probabilistic EAC for the main cost codes of the PMC contractor. To perform this calculation, we utilized the KAT Cost Analysis feature. Here's a breakdown of the process:

PMC Project Setup

We created the PMC project in KAT and assigned seven cost codes, as shown in the below screenshot:

Scenario Development

For each cost code, we developed multiple scenarios based on the average and standard deviation (STD) of the Cost Performance Index (CPI). To determine the average and STD, we utilized various ranges of historical data and on some cases, the expected future values.

Procurement Support:

Construction Support:

Probabilistic Extraction

Next, we ran an analysis for each scenario and extracted the probabilistic EAC. Here are some of the results we obtained:

Procurement Support Result:

Construction Support Result:

Overall EAC Combinations

We then calculated a few overall EAC figures by combining different scenarios for each cost code. Here are two examples:

Scenario Combination: EAC1

Scenario Combination: EAC2

Working with KAT made the analysis process easy and provided unique insights and outputs. It's a valuable tool that even project managers and project directors can use for analysis without relying solely on the Project Control team.

So, get your copy and develop an analysis that is required for making more decisive decisions.

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Learn how KAT can streamline your EAC calculations and provide probabilistic insights for better project budgeting.

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