What's confusing is that you have two fields which more or less state the
same data - but based on different assumptions:
EAC - is your best guess as to how much the project will cost assuming that
the risks you have had to date (as calculated in your CPI) continue at a
constant rate. The easy calculation for this is BAC / CPI, where CPI is a
measure of your work efficiency.
Cost - is your best guess as to how much the project will cost assuming that
the risks you have had to date do not continue.
So basically, all issues of padding aside, Cost is an optimistic outcome
for the project budget, while EAC is a bit more pessimistic estimate of the
project budget. EAC will only be meaningful if you are doing Earned Value
calculations in your project. Otherwise, you should probably just use the
Cost field.
BAC is your approved budget at completion. That should generally be the
same as your Baseline Cost.
The goal then is to track the EAC against your BAC to see what kind of cost
overruns are predicted on the project:
Variance at Completion = VAC, VAC = BAC - EAC, or VAC = Baseline Cost - EAC
Note that the Cost Variance field has a slightly different calculation:
Cost Variance = Cost - Baseline Cost
....which in some circumstances will give you the opposite of the VAC calculation.
If you're not using Earned Value, stick to the Cost Variance.
For all of these fields, you should ensure that you have the Project Summary
task displayed so as to see the rollup of the field data.
If you do plan to implement Earned Value, consult a local PM training group
to get trained on EVMS. After having done that, talk to practitioners of
EVMS in MS Project to get a feel for the challenges and opportunities of
using that method.
-A
- Andrew Lavinsky
Blog:
http://blogs.catapultsystems.com/epm