Guide to Variance at Completion (VAC) - PMBOK Guide Seventh Edition
Variance at Completion (VAC) is a critical concept in the domain of Project Management. It is a component of Earned Value Management (EVM), a systematic project management process used to find variances in projects against the project plan.
Importance: VAC helps in forecasting if a project will finish over or under budget. It enables project managers to take appropriate corrective actions to bring the project back on track.
Description: VAC is the difference between Budget at Completion (BAC) and Estimate at Completion (EAC). A positive VAC indicates a project under budget, while a negative VAC suggests a project over budget.
Formula: VAC = BAC - EAC.
Analyzing VAC: If VAC is positive, the project is under budget. If the VAC is negative, the project is over budget. If VAC equals to zero then the project is right on budget.
Exam Tips:
1. Understand the formulas associated with VAC and how to calculate it.
2. Be able to interpret the results of your calculations.
3. Practice VAC problems to ensure you understand this concept fully.
4. Don't forget, a positive VAC is good (under budget) and a negative VAC is bad (over budget).
5. Know how to use VAC to formulate a corrective action plan.
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Variance at Completion practice test
Variance at Completion (VAC) is an EVM metric used to forecast the expected difference between the project's final budget (Budget at Completion) and the estimated cost of the project (Estimate at Completion). It is calculated by subtracting the Estimate at Completion (EAC) from the Budget at Completion (BAC), i.e., VAC = BAC - EAC. A positive VAC indicates that the project is expected to be under budget, while a negative VAC suggests that it will be over budget. Project managers can use this measure to anticipate potential cost overruns and take corrective measures, such as adjusting resource allocation or reevaluating project priorities, to better align the project's final costs with the initial budget and increase the project's success.
Time: 5 minutes Questions: 5
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Project Management Professional Preparation Package (2024)
- Earn 35 PDUs needed for your PMP certification
- 8199 Superior-grade Project Management Professional practice questions.
- Accelerated Mastery: Deep dive into critical topics to fast-track your mastery.
- Unlock Effortless PMP preparation: 5 full exams.
- 100% Satisfaction Guaranteed: Full refund with no questions if unsatisfied.
- bonus: If you upgrade now you get upgraded access to all courses