What Is Estimate at Completion (EAC)? EDGEBIC Definition

Estimate at Completion (EAC) is the projected final hours or cost of a job, calculated from the efficiency the work has shown so far. In EDGEBIC by User Solutions, EAC takes the hours already spent and adds the remaining budgeted work adjusted by the cost performance index, so a job that has been running over is forecast to finish over. Unlike the fixed Budget at Completion baseline, EAC updates every time you run the earned value report, giving a live prediction of where the job will land.

This entry is part of the EDGEBIC glossary series. For the broader planning vocabulary, see the manufacturing glossary. EAC is the forecasting half of earned value in manufacturing, and it pairs directly with the fixed Budget at Completion baseline.

How Estimate at Completion Works

A job's plan tells you what it should take. EAC tells you what it will take, given how the work is actually going. The engine already tracks two facts as actuals arrive: the hours spent to date (actual cost) and the efficiency of that spending, expressed as the cost performance index (earned value divided by actual cost). EAC combines them.

The standard formula EDGEBIC uses is:

• EAC = actual cost + (BAC minus earned value) divided by CPI

Read it in plain terms. The hours already spent are sunk, so they come in at face value. The work still remaining is BAC minus earned value, and it is inflated (or deflated) by dividing by CPI, on the assumption that whatever efficiency the job has shown so far will hold for the rest. A CPI below 1 stretches the remaining hours; a CPI above 1 shrinks them.

The companion figure is variance at completion, which is BAC minus EAC. It is the expected overrun or underrun in hours: negative means the job is heading over budget, positive means it will finish under. Where BAC is the frozen commitment and earned value measures progress, EAC and its variance are the report's forward look.

A Concrete Example

Return to Job J-100, a five-step Widget A routing with a 50-hour Budget at Completion.

With S1 through S4 done, actual hours total 55. Earned value caps at BAC, so EV is 50 hours. The cost performance index is 50 divided by 55, which is 0.91. Now the estimate:

• EAC = 55 + (50 minus 50) divided by 0.91 = 55 + 0 = 55 hours
• Variance at completion = 50 minus 55 = minus 5 hours

The forecast: the job will close at roughly 55 hours, 5 hours over its 50-hour budget, a 10 percent overrun. Because all completed steps are physically done, the schedule is fine, but the cost story is not, and EAC is the number that says so before the job is closed.

How EDGEBIC Uses Estimate at Completion

EAC and variance at completion are columns in EDGEBIC's Earned Value report, alongside BAC, earned value, and the two performance indices. Running the report for a single job or a date range recomputes them from the latest actuals, so the estimate is always current. The walkthrough in how to run the earned value report in EDGEBIC shows where the columns sit and how to read them.

Two practical notes. Because EAC leans on CPI, it is only as good as the actual hours logged, so accurate actuals matter more here than on any other report. And because BAC respects the primary-hours-only rollup, EAC inherits that basis too: on parallel routings it forecasts against primary hours rather than double-counting mirrored siblings.

For the whole earned value picture (planned value, the schedule and cost indices, and how completion percent is capped), read the earned value overview. EAC is the piece that turns those measurements into a prediction a planner can act on.